[Interview] Donato Sferra Of Toronto’s Hillcrest Merchant Partners

Toronto’s Donato Sferra comes from a working-class background and credits hard work for a large part of his success as a financial services executive.

Building extensive experience in the financial service industry over a twenty year career, Donato Sferra began his financial career as an equity research analyst at TD Securities, specializing in auto parts, solar and automation. Sferra followed this by spending two years at Pinetree Capital, a small-cap focused firm and an angel investor in the mining, energy and technology sectors. After a stint at Macquarie Group as director of institutional sales, he moved to Dundee Capital Markets, eventually becoming the managing director of investment banking, where he worked in the cannabis, mining, gaming and tech industries. Today, Sferra leads Hillcrest Merchant Partners, a Toronto-based merchant bank and venture capital firm focused on early stage and mid-market growth companies, which he co-founded with fellow managing partner, Mark Attanasio.

Donato Sferra recently spoke with Young Upstarts about his professional background, the venture capital space and ideas that he is excited about.

As a professional who has created a path for themselves in the financial services and banking industry, what do you credit the most for your success?

I would have to say hard work and having a passion for what I do.  I’ve been interested in business since I was very young. I was curious and excited about the idea, and the inherent opportunities. One of my friend’s fathers was a very successful entrepreneur and I would pepper him with questions every chance I had. He told me that because there was no business background in my family, I should stay in school and get lots of letters behind my name and I took that advice to heart. On top of that, I had a strong work ethic thanks to my family, who were blue collar hard workers. I started working when I was 9 years old and eventually saved enough money to buy myself a car and put myself through school.  But, to be honest, simple hard work and determination has been the backbone of my career from the very beginning.

What advice would you give to budding entrepreneurs when it comes to the venture capital sector and sourcing funds for new businesses from this sector?

Understand the value of good ideas, but also understand the value of having a talented, well-run team to execute those ides. I think every great company starts with an idea. But, the key is connecting great ideas with a talented team run by experienced management.  That’s the complete package that those in the venture capital world are interested in seeing.  If you’re an entrepreneur with just an idea, then there is something missing and you most likely have not reached that stage of attracting venture capital interest.

Are there any specific entrepreneurial trends you are excited about?

The legalization of cannabis is a trend that we are really excited about. Hillcrest Merchant Partners is already involved with some of the top companies in the cannabis space. They were startups just six years ago and some have already evolved into multi-billion dollar companies. They are now branching out to other parts of the world where people are looking at Canada as a model for cannabis legalization. Of course, the United States remains a unique challenge. Individual states bring in billions of dollars in cannabis revenue, but because it remains illegal at the federal level, it’s difficult for companies to accomplish basic daily tasks like banking, which is federally regulated. We remain hopeful that things will change once the U.S. recognizes the success of the Canadian model.

Do you have any recommendations for young entrepreneurs?

Take every meeting that’s offered to you because you never know who is going to come up with that next great idea. It could even be the guy who has come to you with 10 not-so-great ideas over the past 12 months. Some of the best businesses that Hillcrest Merchant Partners now works with were turned down by many people on Bay Street. So you can’t discount anybody.

I think it’s also important to stay productive around the clock. I live on just a few hours sleep; my phone never stops ringing and the e-mail flow is constant. That’s because people know I’m available and it helps us stay busy, which ultimately leads to business success. I also advise young people to read everything they can, even things that aren’t directly related to their business. That brings me back to ideas, because you can learn so much from reading trade magazines, journals, white papers and books. It all helps to kickstart the brain.

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