While the white-collar world of venture capital financing might seem as far removed from the combat theatre of special military operations as Afghanistan is from Bay Street, Glenn Cowan knows better.
“Venture capital and special operations are identical,” says the Ottawa-based ex-soldier-turned-businessman.
“It is a deployment of finite resources at a specific point in time and place to achieve a desired effect in a high-risk, high-reward environment where the margin of error is minimal but the risk of failure is massive. And then you have to get the hell out of there.”
Cowan, 43, is the founder of ONE9 Venture Partners, an investment fund he launched in October 2020 after retiring from his role as a squadron commander with Canada’s elite special operations unit, Joint Task Force 2.
Over more than a decade with the elite fighting unit, Cowan led high-risk military missions across the globe. What he came to realize was that escalating security threats were spawning a technological revolution aimed at countering bad actors – but no one had yet developed a cohesive strategy for commercializing all that technology.
“The amount of threat we’re seeing, coupled with an incredibly rapid change to the way the world is working, it’s kind of thrust everything into a national security paradigm,” says Cowan, who was discharged from the military after being injured in a training accident in 2016.
“There’s a new normal in national security that I think collectively we need to wake up to. I think Canada is poised to deliver some really fantastic capabilities to the world to defend national security and critical infrastructure.”
With that goal in mind, Cowan has teamed up with Shopify co-founder Daniel Weinand to launch a new venture capital fund aimed at financing national security startups.
$50M fundraising target
He and Weinand will serve as general partners of the fund, which is anchored by a $10-million investment from Toronto-based Kensington Capital Partners, the firm that also backed travel startup Hopper, financial reward company Drop and credit education firm Borrowell.
Cowan and Weinand, who met through a mutual friend a couple of years ago, have a fundraising target of $50 million. They’re open to investing in most security companies, but say they will stay away from funding anything involving guns, bullets and weapons.
The pair are being joined by a third, as-yet unnamed general partner who has a “huge amount of VC experience and private-sector security experience,” according to Cowan.
“Between the three of us, we are a very dynamic team,” he says.
Cowan comes by his entrepreneurial ambitions honestly.
His great-grandfather founded a company that supplied British forces with chocolate during World War I, and his grandfather helmed the firm that manufactured Dubble Bubble gum in Canada. Later, his father launched a venture that made Christmas decorations.
Cowan remembers attending family business meetings as a youngster and being captivated.
“I loved entrepreneurship,” explains. “My grandfather made me read stock charts.”
After joining the Canadian Forces reserves to help pay for his bachelor’s degree in international relations and history at McGill University, Cowan transferred to the regular forces in September 2001 – just as the 9/11 attacks threw the world into turmoil.
As a member of Princess Patricia’s Canadian Light Infantry, he was among the first troops from this country to be deployed to Afghanistan in 2002. The following year, he was selected to join JTF2, where he spent the next 13 years.
Cowan, who began investing in businesses while he was still in the military, likens a special forces unit to a more extreme version of a U.S. technology accelerator key to the success of Airbnb, Dropbox, Stripe and DoorDash.
"It’s Y Combinator on steroids. We’re seeing problems and threats before the rest of the world knows that they’re a problem."
“It’s Y Combinator on steroids,” he explains. “A tier-one special forces unit is a technology accelerator and incubator. We’re seeing problems and threats before the rest of the world knows that they’re a problem.”
While the Canadian Venture Capital and Private Equity Association says last year saw a record $14.7 billion invested over 752 deals, Cowan believes not enough of that money went to companies in the security space.
With a power struggle forming between the U.S. and China, and Russia invading Ukraine, Cowan says Canada can't overlook security and his efforts can be key.
“The time is right for this type of fund,” he says.
“We’re in a very unique spot to be able to really help position and drive some of these changes and bring technologies to market that are of critical importance.”
But it’s not just looming global military clashes that make the space so intriguing, he adds.
“One of the biggest threats to our national security is climate change,” says Cowan, whose firm has also landed former defence minister Peter MacKay as a special adviser.
“That opens up a huge market of potential investment opportunities for us. We don't have to get pigeonholed into traditional cyber.”
'Time to double down'
Kensington senior managing director Rick Nathan, who is joining ONE9’s advisory board, says Cowan and Weinand have the right mix of military expertise and entrepreneurial know-how to succeed in a sector that’s poised to grow exponentially.
“There is no company in the world that is thinking about reducing their spending on cybersecurity,” Nathan says. “Everyone’s got to protect themselves. Even though we’ve been investing in the sector for several years, it feels like it’s time to double down and do more.”
While the U.S. is home to a number of well-established funds that serve the national security industry, that’s not the case north of the 49th parallel, he notes.
“Here in Canada, we just haven’t had that,” Nathan says. “I’m enthusiastic about the opportunity in the sector, and I believe that Glenn and Daniel are in a great position to capitalize on that opportunity.”
Now at six employees, ONE9 is planning to hire more staff in short order and expects to announce its first seed investment round later this week.
“We’re off to the races,” Cowan says with a chuckle. “It’s fun. We’re having a blast.”
– With additional reporting from the Canadian Press