Top Mining Minds: Sheldon Inwentash, ThreeD Capital
For well over 30 years, Toronto native Sheldon Inwentash has been making his mark in Canadian business circles as an entrepreneur and investor. He is the Founder, Chairman and CEO of ThreeD Capital Inc., a venture capital firm focused on investments in companies in junior resources, blockchain and artificial intelligence, among other sectors.
With a long and successful track record, Sheldon has founded 5 companies and led 9 others as CEO. In 1994, he co-founded the first commercial pharmacogenomics company, Visible Genetics, and exited in 2001 to Bayer.
Sheldon’s next big venture led him to Pinetree Capital, a value-oriented investment and merchant banking firm where he successfully created significant shareholder value in the mining and technology industries. His most notable accomplishments included early investments in Queenston Mining (acquired by Osisko Mining Corp. for $550-million), Aurelian Resources (acquired by Kinross for $1.2-billion) and Gold Eagle Mines (acquired by Goldcorp for $1.5-billion), to name a few.
Through the years, Sheldon has been instrumental in providing financing for hundreds of public and private start-up companies that have reached a fair value of $800 million. As the founder of ThreeD Capital, Sheldon and his team provide investors with significant exposure to ground-floor opportunities involving early-stage, promising companies.
In 2007, his alma mater, the University of Toronto, awarded Sheldon with an honorary degree of Doctor of Laws in recognition of his leadership as both an entrepreneur and philanthropist, and for his dedication to youth. That same year, he was named an Ontario finalist for the Ernst & Young entrepreneur-of-the-year award.
We recently sat down with Sheldon Inwentash to discuss his legacy as an investor, his work in the junior mining space and the ways ThreeD Capital expands where Pintree left off.
Thanks for joining us, Sheldon. Tell us more about what ThreeD Capital does and how it is investing in the junior mining space.
Thank you for the opportunity. ThreeD Capital invests in emerging, disruptive companies in the technology space, electric vehicles (EV) industry, psychedelics and junior mining. We invest in very early stage companies where we take a leading role in helping them to develop their business. In many cases, we are the lead investor. We refer to ourselves as an ETF for ground floor investments because we get significant exposure very early on and we have proprietary deal flow.
You led Pinetree Capital through two decades and in that time created significant shareholder value through early investments in several mining companies. Can you elaborate on those projects?
Sure. We had between 10 and 20 companies that we had very successful, material exits. We invested in companies with a very low market cap, participated in multiple financings, and then worked with management to create exits. Over that period of time, I assisted the companies in raising perhaps as much as $20 billion of outside capital to help fund these businesses so that they could develop their projects in mining. We were able to invest ahead of the curve where we saw macro changes occurring, whether it was in precious metals, industrial metals, rare earths and commodity metals like copper, nickel and so on.
Today, ThreeD Capital is actively involved in leveraging our expertise and our network to help build companies to success.
ThreeD Capital is described very much like Pinetree once was, a venture capital firm focused on opportunistic investments in companies in the junior resources, technology and biotechnology markets. Specifically, what do you look for when choosing companies to invest in?
First, I’ll actually start off with the biggest difference between Pinetree and ThreeD Capital. At Pinetree, as much as we took a hands-on approach, we took a very big portfolio approach where we were passive.
In the case of ThreeD Capital, we are primarily active, hands-on, value-added investors, which in many cases means we are strategic advisors to the company. We are very big on helping to develop strategic partnerships to develop these businesses. We are almost an extension of the management team, so we are doing much fewer investments than Pinetree did.
In the case of disruptive technologies, we’ve been looking very specifically at the digital renaissance, which has always been there, and the paradigm shift of working remotely and working through technology. We’ve had some significant early success in investing in that space.
In the minerals space, my philosophy is that I want to invest in things that are non-fiat, that are hard asset based. We are investing deeply in the precious metal assets. We’re also investing in the industrial minerals and rare earths. This is very similar to what we did at Pinetree, except with fewer companies.
Any ThreeD Capital investments in the works that you are most excited about and willing to share?
We have a very buoyant pipeline of companies that we’re looking at. When I use the phrase proprietary deal flow, it’s typically in a case where we’ve built a relationship with one successful company and management is now creating another company. We also have spinouts for current companies that we’re invested in. Oftentimes, we are the first call in terms of financing.
We will start reporting our Net Asset Value (NAV) on a monthly basis, beginning in January. Investors will be able to see approximately how our portfolio has performed from the prior month, so they no longer need to wait for the quarterly numbers.
With Pinetree, we traded at two and half times NAV, which is very unusual. We got that premium because we could get involved in things that retail investors cannot normally get access to.
At ThreeD Capital, we are putting more emphasis on growing our junior resource portfolio. We have a pipeline of deals in the making so stay tuned!