MindBeacon: Sam Duboc's Foray Into the Public Eye
It’s been a pretty slow year for IPOs in Canada; U.S. SPACs are where all the action’s at right now. We’ve had a few notable issuances: NVEI, RPTX, FUSN, DCBO, BBTV, DND. Still, Mickey-Mouse-stuff in comparison to the size being moved south of the border. I guess we gotta take what we can get. That being said, a pretty interesting IPO is in the works right now that I think is worth discussing: MindBeacon.
MindBeacon is a Toronto-based guided digital mental healthcare provider founded and run by Bay Street veteran Sam Duboc. Their platform, BEACON, has been up and running for ~3 years and has garnered some pretty heavy clout along the way; in May, BEACON was selected and funded by the Ontario government to provide Ontarians with free online therapy. If you’re unfamiliar with their services, I encourage you to check out their platform. It’s not for everyone, as they outline quite clearly, but definitely worth considering. By all accounts, a legitimate player in the telehealth space and a company trying to make real headway in improving peoples’ lives.
Their prospectus, filed December 7, outlines a C$50mn commons offering led by TD Securities and Credit Suisse. Bloom Burton, Beacon Securities, and Echelon are also in the syndicate. One can only hope that this syndicate doesn’t screw it up. But hey, at least it’s not a GMP deal.
While I analyzed the deal and have strong thoughts about the telehealth space, I’m not here to dish out stock picks. I’ll leave that to another blog. I think what is of most interest here is Sam Duboc’s story: an oft overlooked tale by many of my Bay Street peers.
Sam’s got monstrous, Harvard-grade credentials. He was an MD at CIBC Capital Partners, co-founded LoyaltyOne (Air Miles’ parent co.), and has made successful strides in private equity investing via his ~C$2bn buyout firm, Edgestone Capital Partners. A track record to envy by many an aspiring financier. Sam - like most people - is not without his fair share of rough patches, though.
In 2006, Edgestone got in bed with the wrong independent: GMP Securities. The C$152mn arrangement turned sour quickly when the GFC rolled out; by 2010, it had gotten so bad that Sam and his co-founders, Gilbert Palter and Stephen Marshall, officially resigned from GMP and worked instead as arm's-length “consultants” for their funds. I suppose they were ahead of the curve when it came to social distancing. That same year, GMP wrote down its investment in the buyout firm by ~53%.
The trio eventually took back control of their firm in 2011, but at substantial cost. Moreover, despite the partners having bought back the LP units, GMP still retained its carried interest entitlements in Edgestone’s funds and continued to own all the GP shares. An ugly and bizarre spat that I’m sure both parties would rather be forgotten in the footnotes. But whereas GMP would continue to flounder through a slew of more failed ventures (re: CQI Capital Management / GMP Investment Management, blockchain and cannabis banking), Sam’s career took a different turn.
Despite the GMP-sized setback, Sam continued to go all in on private equity and venture capital. Edgestone eventually turned around, and resulted in a ~38% annualized IRR on all its investments as of the end of 2015 – 4 years after splitting from GMP. In 2013, Sam helped form Canada’s Venture Capital Action Plan as an advisor to the Department of Finance Canada and subsequently served as the BDC’s chairman from 2014-2018. At the same time, he’s also made successful strides in philanthropy, most notably through his non-profit organization Pathways to Education Canada.
Today, in addition to running MindBeacon, he runs a family office called Elkland Capital that invests in a variety of early-stage companies. I can’t even begin to imagine what this guy’s Outlook calendar looks like. It’s not just him that’s succeeding, too. Many of Edgestone’s alumni have gone on to join some powerhouse shops (Searchlight Capital, OMERS Ventures to name a few).
Sam is a pioneer in an area of Canada’s capital markets that was, at best, rough around its edges. It still is, but it’s gotten noticeably better. Around the time the GMP debacle was taking place, Sam’s brother passed away. Sam has been vocal about the struggles he’s faced with the depression that followed him after. MindBeacon is his wife’s and his’ mission to provide everyone with better access to mental healthcare. Despite all the adversity he’s faced, it seems like Sam has still managed to create success for himself and is now at his best – doing something he genuinely loves and believes in. It’s a rare thing to see, especially in this industry.
Some of you may call me soft for jumping on the mental health awareness bandwagon, but I have to be honest: I don’t really care. A combination of strong work ethic and perseverance can certainly take you far, but without the proper mental acumen you can’t really expect optimal performance. The way I see it, every single firm on Bay Street – sell-side and buy-side – is built upon a universal piece of intellectual property that we all possess: our brains. Shouldn’t you want to take care of it?
For What It’s Worth,
G.G.