Techopia, Insider Only

When Caitlin MacGregor and Plum came along, the time was ripe for Jennifer Francis to invest in a woman-led firm

March 27, 2024

Editor's Note

In recognition of International Women’s Month, Ottawa’s Capital Angel Network and the National Angel Capital Organization present a series of stories celebrating the women who mobilize angel investment for Canada’s bold women entrepreneurs.

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Before Caitlin MacGregor co-founded Plum, a transformative talent assessment platform that uses objective data to match people to roles, she was president of a company that tasked her with hiring for a significant role within the organization. When an executive coach told her the wrong hire would cost the business hundreds of thousands of dollars, she turned to psychometric assessments to closely analyze applicants. “Two candidates stood out for completely different reasons. One had a master’s degree and five years of relevant work experience, he was the golden boy by every measure. My CEO wanted me to hire him, but his assessment results showed he had a mediocre work ethic,” MacGregor remembers. “The other scored in the top three percentile in the entire workforce for productivity. My executive coach told me I’d be an idiot not to hire her.” So MacGregor ran her own experiment and hired both, the perfect-on-paper guy and the woman with the highest assessment score based on psychometric data. “Three months in, we found out the golden boy was only doing 10 per cent of his work and he was let go. The woman was not only doing all her work, but his, too. And within 18 months, she had replaced me as acting president of the company when I went on maternity leave,” MacGregor says. “She had two art degrees, her only work experience was seven years of waitressing, and she didn’t know how to use Excel. If I’d just relied on traditional resumes, there’s no way I would’ve interviewed her, let alone hired her.” The experience prompted MacGregor to spend the next two-and-a-half years learning about the science behind performance and behaviour in the workplace, the field of industrial organizational psychology, and screening what she called “diamonds in the rough” — people she likely wouldn’t have considered interviewing or hiring but who turned out to be top performers. That was nearly 12 years ago, when potential hires were selected for interviews based on technology that scraped a bag of keywords from job descriptions and resumes to determine the “best” candidate for a role. “It was always based on who has the most user experience, who’s worked for the competition, who’s gone to the top schools. But these things don’t predict performance. They can tell you if someone can do the job, but they can’t tell you how well they’ll do the job,” says MacGregor. At the time, psychometric assessments were being sold by major consulting firms, but the data wasn’t accessible to an average talent acquisition specialist. “That’s where the money was made, in analyzing and interpreting the complexity of this psychological data, it wasn’t something everyone could do or afford. People should be screened not on what they’ve done historically, but on what they could do, given the opportunity, and I saw an opportunity to democratize that data.” MacGregor and her husband Neil, Plum’s co-founder and chief product officer, started their company and their family, as timing would have it, within the same week. It wasn’t long before the husband-and-wife team moved to Waterloo, Ont., and joined Communitech’s Hyperdrive accelerator program, a four-month boot camp for high-potential tech startups. Still, both the market and the work it took to launch was harder than MacGregor had anticipated, especially for a company co-founded by a woman. “Only two of the 11 companies participating in the Hyperdrive program then were women-led. We didn’t fit the pattern of a typical startup. I wasn’t like the poster child of founders: a 20-something white male in a hoodie from Stanford with connections across Silicon Valley,” she says. “But we knew we had something that needed to be in the market and we had to do it without fitting that pattern.” MacGregor wasn’t ready for investment firms, but instead got in front of angel investors. “They’re amazing because they’re looking for a different pattern. They’re looking at whether they believe in the CEO and team. They ask themselves, ‘Do I believe this founder has the perseverance, tenacity, capability and vision to find that elusive product market fit?’ and, ‘Do I believe the product they’re trying to solve needs to be solved and do I care about the solution?’” she says. “Angels were the ones who saw potential and wanted their kids entering the workforce to be set up to flourish in their careers. They’re the ones who could see the world we wanted to create before we had enough proof. They bet on us. Without their funding, we wouldn’t have the success we have today. Full stop.” Jennifer Francis was in the room when MacGregor pitched to Ottawa’s Capital Angel Network (CAN) in late 2015. She had retired from a successful career in the software sector and started angel investing in 2014 to get involved and contribute to Ottawa’s economy.

Jennifer Francis is a technology mentor, advisor and angel investor.

“Angel investing seemed like a good way to address issues of access to capital and to help companies grow,” says Francis, who was only the second woman investor in the group. “We weren’t seeing many female founders, so I remember when Caitlin came in. She was dynamite; she was on the ball, she knew her stuff, she was clear and super responsive. Looking at feedback from members at the time, many said it was the best pitch they’d ever heard.” Francis and a fellow angel led the due diligence and, within a month, the deal closed. Prior to Plum, Francis had backed three other investments. MacGregor was the first female founder Francis had invested in, which was even more significant since Francis was Plum’s first female investor. Plum went through two rounds with angels, raising about $2 million over two-and-a-half years. When Real Ventures, a leading early-stage VC, came in, many of MacGregor’s angels stuck around. “They came back multiple times. All the angel money we received was game-changing. I got so many more yesses from angels than from traditional VCs and that support allowed us to go on,” says MacGregor. “Every quarter we send an investment newsletter and report on our metrics and we send it to all our angels because I want them to know how much we value them. Some, like Jennifer, have been with us for 10 years.” Of course, much has changed in the past decade. In 2018, MacGregor’s team realized they had a leg up on everyone else in the market when it came to job matching. They weren’t just able to match for executive roles, but they also could assist with finding the right person for every role in a company. “We saw the opportunity not just to provide a solution for talent acquisition, but to be the first platform in the world to bridge talent acquisition and talent management. Our competitors were missing that. Companies could have the same data, not only of their potential hires, but also of their employees. We were thinking about internal mobility before it was the hottest thing in the market,” MacGregor says, adding that the platform can assist with learning and development, as well as succession planning. The full platform launched in 2020 and supported large enterprise companies such as Scotiabank, Whirlpool and Bloomberg. “We’re now at 50 employees and work with massive global brands. We helped Scotiabank go from hiring people with only finance or business backgrounds from five elite universities, to hiring from 33 different colleges and universities and 40 per cent have backgrounds in STEM. We’ve increased their hiring of underrepresented minorities by 60 per cent and doubled retention. This is game-changing.” Today, with just over 10 per cent of Fortune 500 companies being led by a woman, those early cheques that MacGregor received from angels like Francis were just as game-changing. “It’s not just about the bottom line, (angels) want to make an impact,” MacGregor says. Now, Francis and women across the ecosystem are on a mission to make angel investing easier and more desirable for women. “When Jennifer invested in us, I was happy I finally had the diversity I represented mirrored in my investors, but it was too bad there weren’t more women investors. That’s changed in the last decade because women like Jennifer saw the need and are actively working on changing the landscape,” says MacGregor. “Studies have shown when women are on the investment side of the table, it’s easier for female founders to get investment. There’s no excuse today, in this ecosystem, not to find examples of female success on both sides of the table.” Francis, who is chair of CAN and a co-founder of SheBoot, is proud of the advances that have been made in recruiting women angels. In fact, CAN is now about 30 per cent female, versus the two women who participated when MacGregor pitched nine years ago. Francis’s advice to women who are on the fence about dabbling in angel investing is simple: give it a shot. “It’s really fun. Seeing what motivates passionate founders and getting involved in their cool innovations and ideas without having to go all in is great,” she says. “You should also look at how you can use your capital to leverage outcomes you’d like to see. You can make a positive impact on an industry or issue, on a specific founder, and even on your region’s economy. There are so many advantages.”