We seek to set ourselves apart from other funds with an emphasis on pre-seed and seed stage company investments and applying our “Founders for Founders” approach. There are limited funds focused on early-stage companies due to the longer development cycle and additional work required to support and scale. However, the potential for outsized returns exists by making early investments in companies with high growth potential. The General Partner of the fund, being RHA Ventures, brings fund management experience, extensive domain knowledge and operational expertise in the target sectors which increases the likelihood of rapid scaling and business success.

RHA expects to raise $30M in capital, with each share (“unit”) of the fund having a value of $50K. Limited Partners who invest in the fund will require a minimum investment of $250K (for 5 units) and is considered as Committed Capital. The Committed Capital will be called from investors in tranches over a 5 year Investment Period. 519 Growth Fund II has an intended term of 10 years.

RHA plans to target companies in the agriculture, agri-food and technology enabled spaces. The fund may consider companies on the periphery of this scope when it is in its investors’ best interests.

RHA is well-positioned to discover business opportunities in agri-food and technology enabled companies due to our leadership team possessing a wealth of knowledge and experience in these target sectors. RHA partners bring extensive domain expertise in verticals such as Digital Ag communications & marketing, Crop science, Integrated livestock production, Agri-food analytics, SaaS platforms and AI. The partners bring experience and networks not only in Canada, but also the US and international markets.

At the outset, certain basic criteria will define which businesses we investigate as candidates for our support. Key factors include:

1) A coachable founder(s)

2) Minimum viable product (MVP) or service addresses customer problem and is established with initial revenues

3) Opportunity for establishing intellectual property or other defensible market position

4) Product or service is scalable

5) Addressable and sizable market opportunity with identifiable exit channels.

6) Desire for exit within the fund’s investment period.

7) Meets ESG and Responsible Investment Policy

Early-stage companies (Pre-Seed and Seed stage) are generally underserved by venture capital in Canada. According to the Canadian Venture Capital Association (CVCA), only 8% of all venture capital investment was directed to Pre-Seed and Seed stage companies in 2022. These companies present great opportunities to invest at favourable valuations and scale at a fast rate by applying the expertise and capability of the partners at RHA Ventures. This segment of the market has the greatest potential to generate outsized returns with exit opportunities through subsequent funding rounds (ie. Series A) and through acquisition by strategic players in the respective verticals.

The Agri-Food industry is a significant sector generating over 7% of Canada’s annual GDP. This sector is also underserved by venture capital attracting only 2% of all investment funding in Canada in 2022 (CVCA). Significant opportunities exist to develop and commercialize technologies to address the food demands of a growing global population, reduce the impact of emissions and climate change, while improving the sustainability of our global food supply. The sector also lags in adoption of digital technologies providing a bridge to the fund’s investment focus in information and computing technologies (ICT). Due to the global nature of this industry, strategic multi-national players provide exit opportunities through their interest in acquiring innovative technologies and services. Due to the deep domain knowledge and networks of RHA Ventures in this sector, impactful investments with strong returns are envisioned.

The Technology Enabled / ICT sector remains the fastest growing and largest sector for venture capital investment providing high returns for fast scaling companies. The sector represents over 7% of Canada’s annual economic output with venture investment representing over 60% of all funding in 2022 (CVCA). The sector is capable of innovating quickly providing efficiencies and productivity gains to businesses across sectors. The fast-growing nature of the industry also provides for M&A and acquisition opportunities to crystallize investment gains. Domain expertise in this sector is another core strength of RHA Ventures allowing for prudent investment decisions and operational support to company founders.

RHA plans to invest in approximately 40 – 50 companies during the 5-year investment period. Approximately 50% of those companies will be pre-seed stage with the balance being seed stage.