Venture Capital in Canada

Posted: November 20, 2013 in BUSI 3810 Course, Entrepreneurship
Tags: , , , , ,

Innovative and high-growth firms need access to capital to ensure success.   In addition to the typical start-up sources of capital – love money, crowdsourcing, angels and the maze of public sector  support,  such firms – early – and late-stages, need access to venture capital (VC) funds.  In Canada, as in most other OECD countries, equity provided in the form of venture capital decreased between 2007 and 2009 and rose slightly in 2010 (OECD 2012). Canada’s venture capital industry has been challenged on a number of fronts in recent years, including persistent poor returns that have led to low fundraising and have limited the amount of capital available to fuel the growth off Canadian start-up businesses (Canada’s Economic Action Plan). In the technology sector, venture capital declined steadily following the tech bubble burst of the early 2000, and returns on investments have been dismal since.   Consequently many high-tech firms are often forced to go south of the border to access US venture capital, leading to a lost of Canadian tech talent to places like Silicon Valley.

Canadian VC investment activity remained at a steady state in 2012 compared to 2011: $1.47 billion in 2012 vs. $1.51 billion in 2011, in about 458 firms each year. Total deal sizes under $1 million represented nearly half of all deals completed in 2012, a continuation of a trend that has become more pronounced in recent years. Software and Internet-focused firms captured about half of VC investments in 2012 (Industry Canada).  Some predicts that 2013 will see  the VC landscape in Canada shifting.  Of note, the federal government’s announced last January  the Venture Capital Action plan, a comprehensive strategy for deploying the $400 Million in new capital over the next 7 to 10 years, which is expected to attract close to $1 billion in new private sector investments in funds of funds (Canada’s Economic Action Plan).

Questions to ponder:

1) What are the overall goals and mechanisms of the Government of Canada’s Venture Capital Action Plan announced in its Economic Action Plan 2012 ?

2) What are the key VC funds in Canada?

3) What are the key VC funds in the US?

4) How would you characterize the Canadian VC funds versus the US VC funds?

5) What are some of the trends happening on the Canadian VC scene?

References:

Canada’s Economic Action Plan – Venture Capital Action Plan http://actionplan.gc.ca/en/initiative/venture-capital-action-plan-0

Industry Canada, Venture Capital Monitor www.ic.gc.ca/vcmonitor

OECD 2012, ‘Canada’, in Financing SMEs and Entrepreneurs 2012: An OECD Scoreboard, OECD Publishing. http:://dx.doi.org/10.1787/9789264166769-6-en

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Comments
  1. 1) The Government of Canada’s Venture Capital Action Plan will help increase private-sector investments in risks that occur early on in the company development, and to increase the support of large-scale venture capital funds from private sector and institutional investors by contributing $400 Million. Overall, the goal of this is to promote Canada’s productivity growth. The action plan also tries to increase the number of successful Canadian companies.
    2) There are five key VC funds in Canada: Private Independent Funds, LSVCC/Retail, Corporate, Government, and other. The “other” section is considered foundations and pension funds. The private independent funds and other funds account for the highest investment in the Canadian market.
    3) The US has many VC funds. All of them seem to be private VC firms. According to a study by Reuters, there 202 funds in 2012, and so far, at the end of the third quarter of 2013, there was 144 funds.
    4) The US VC funds raise more money than Canadian VC funds, and fund more. The main issue, is that there is a scarcity of Canadian VC funds, which is why the government is trying to fix the issue. Also, companies that seek out funding from US venture capitalists, have an easier time entering the US, or other markets.
    5) One trend that is happening in the Canadian VC scene is accelerators, which essentially offers companies a convertible debt, and puts companies through a three-month boot-camp, to come out with a viable business models. Another trend, are investment shows on tv, such as Dragon’s Den, which allow individuals, or small firms to pitch their ideas to the “dragons”, while also getting seen by people watching the show.

    References:
    Canada’s Economic Action Plan – Venture Capital Action Plan http://actionplan.gc.ca/en/initiative/venture-capital-action-plan-0

    Consultations on the Economic Action Plan 2012 commitment for venture capital: http://www.pm.gc.ca/eng/news/2013/01/14/consultations-economic-action-plan-2012-commitment-venture-capital#sthash.aXatQnn6.dpuf

    Industry Canada, Venture Capital Monitor http://www.ic.gc.ca/vcmonitor

    VENTURE CAPITAL FUNDS RAISED $4.1 BILLION DURING
    THIRD QUARTER 2013 -Experienced Funds Dominate the Fundraising Scene-
    http://nvca.informz.net/NVCA/data/images/q313fundraisingreleasefinal.pdf

    Venture capital funds raised $4.1B in Q3 (report)
    http://venturebeat.com/2013/10/07/venture-capital-funds-raised-4-1b-in-q3-report/

    Canadian startups turn to foreign sources where local funding fails: study http://business.financialpost.com/2013/05/28/canadian-startups-turn-to-foreign-sources-where-local-funding-fails-study/?__lsa=07cb-8cf3

    Surge in investment shows Canada loves its startups — and so do U.S. investors
    http://business.financialpost.com/2012/12/31/surge-in-investment-shows-canada-loves-its-startups-and-so-do-u-s-investors/?__lsa=07cb-8cf3

  2. Patrick Smith says:

    Questions to ponder:
    1) What are the overall goals and mechanisms of the Government of Canada’s Venture Capital Action Plan announced in its Economic Action Plan 2012 ?
    The Government of Canada’s goals in the Economic Action Plan in 2012 was to mainly focus more on the needs of the private sector. This is to stimulate the Canadian innovative economy by helping high-potential medium and small businesses the needed capital to grow This included a further funding to the Business Development Bank of Canada to a sum of $100 million to assist venture capital actions. This also includes a promise to commit $1.1 billion over the next five years to support development and direct research. Of this amount, $500 million is allocated to venture capital funding, $400 of which will be used to promote private sector investments with regards to risk capital in its early stages and to support large-scale creations of VC funds that are engaged by the private sector. The plan also maintains the development in the venture capital system, which is vital to the Canadian entrepreneurial culture (Government of Canada, 2012).
    2) What are the key VC funds in Canada?
    The most significant VC funds located in Canada are as follows: VenGrowth, GrowthWorks Capital, OMERS Ventures, and the Business Development Bank of Canada (BDC). Others include Entrepia Ventures, McClean Watson Capital – Canada, iNovia, Rho Ventures, Vanedge, and Wynnchurch Capital (FindTheBest) (Lewis, 2009).
    Labor-Sponsored Venture Capital Corporations (LSVCC). These amount to about 40% of venture capital in Canada.
    3) What are the key VC funds in the US?
    The top ten VC firms in the US are the following: Andressen Horowitz, Sequoia Capital, Accel, Benchmark Capital, Union Square Ventures, General Catalyst Partners, NEA, Kleiner Perkins, Khosla Ventures, and Greylock (Schonfeld, 2013).
    4) How would you characterize the Canadian VC funds versus the US VC funds?
    The most substantial difference between Canadian and US VC funds are the incredibly different roles that the governments play in each respective VC environment. The Canadian market had a great demand for government participation by way of direct financing and the opportunity for tax incentives for private investors. This is a much greater dependency than the US market, which is ruled by mainly private independent funding. Institutional investors provide the majority of US VC funding, however, in Canada investment is more varied. Financing usually emanates from individual investors and corporations (especially through way of LSVCCs) (Government of Canada, 2012).
    5) What are some of the trends happening on the Canadian VC scene?
    As of 2012, there has been significant growth in fundraising activity, while government has matched the previous annual investment. Ontario still leads the country in investment activities as per province, and has grown 4% from 37% the year prior. Quebec follows next with a share of 37%. Altogether, Canadian investors have given a total of $1.1 B in 2012, which shows an increase of 7%. Private-independent VC funds are also still leading activity. This is inversely related with US activity in Canada, which has dropped 22%.
    In addition, deals in information technology (IT) and non-technology sectors have lead the way in activity. Life sciences has also been steady, but clean technology sectors have significantly fallen. IT is up 6% from the previous year to 49%, and life sciences take up another quarter of market share.
    Canadian VC funds have also been less active on the international scene. In total, in 2012, VCs have invested 16% less than 2011 to a total of $201.
    In Canada, VC invests totaled $1.5 B in 2012, which is the highest since 2007 (Government of Canada, 2012).

    FindTheBest. “Compare Venture Capital in Canada.” FindTheBest. N.p., n.d. Web. 24 Nov. 2013. .
    Government of Canada. “ARCHIVED—Issues Surrounding Venture Capital, Initial Public Offering (IPO) and Post-IPO Equity Financing for Canadian SMEs Overview of the Venture Capital Markets in Canada and the U.S..” Government of Canada, Industry Canada, National Capital Region, Office of the Deputy Minister, Small Business, Tourism and Marketplace Services , Small Business Branch. N.p., 5 July 2012. Web. 24 Nov. 2013. .
    Government of Canada. “Chapter 3.1: Supporting Entrepreneurs, Innovators and World-Class Research.” Budget 2012 -. N.p., n.d. Web. 24 Nov. 2013. .

    Lewis, Rob. “20 Most Active Venture Capital Investors in Canada.” – Techvibes.com. N.p., 9 Oct. 2009. Web. 24 Nov. 2013. .
    Investopedia. “Labor-Sponsored Venture Capital Corporations – LSVCC.” Investopedia. N.p., n.d. Web. 24 Nov. 2013. .

    Schonfeld, Erick. “The Top 10 VC Firms, According To InvestorRank.” TechCrunch. N.p., 25 May 2011. Web. 24 Nov. 2013. .

    Thomson Reuters. “Canada’s Venture Capital Market in 2012.” Thomson Reuters. N.p., n.d. Web. 24 Nov. 2013. .

  3. Tony Luong says:

    1) What are the overall goals and mechanisms of the Government of Canada’s Venture Capital Action Plan announced in its Economic Action Plan 2012?

    The government’s venture capital action plan is a way to help boost the amount of venture capital in the Canadian economy in the next 7 – 10 years. Canada’s past leading innovative businesses have gained great benefits from venture capital. By supporting this route, it will create more jobs for people, increase the amount of innovation, and help boost the Canadian economic growth. More specifically this will help support the innovative and high-growth businesses. The breakdown of how the $400 million invest in new capital consists of: 1) $250 million going towards the new large private sector-led national funds of funds, 2) approximately $100 million to large private sector-led funds of funds that are already existing in the Canadian economy, 3) a cumulative investment of around $50 million in 3-5 high-performing venture capital funds, and 4) other portions for the continual development of the venture capital system and entrepreneurial culture in Canada.

    2) What are the key VC funds in Canada?

    The key venture capital funds in Canada went towards Information technology and non-technology sectors (more significantly in the life sciences sectors). In 2012, almost half of the venture capital investments were made in the Information technology sectors like software and internet-based development. The top venture capital investors in Canada are iNovia Capital, Relay Ventures, and Omers Ventures who continually provide capital to valuable start-up companies within the economy. At the same time, there are a number of foreign venture capital investors that have provided $564 million to large deals within Canada.

    3) What are the key VC funds in the US?

    The key venture capital funds in the US is focused around the computer and consumer electronics, communications, life sciences, and industrial/energy sectors.

    4) How would you characterize the Canadian VC funds versus the US VC funds?

    I would characterize the Canadian VC funds as a growing trend. The VC funds are gradually growing much larger than compared to in the past as seen from the 2012 Economic Action Plan. The initiation of the Venture Capital Action Plan will greatly benefit the up-and-coming and existing large firms of Canada. In terms of overall VC funding, Canada is still behind that of the US but that is only because the US has such a large economy. In Canada there is a heavy effort to support the information technology sectors but the Silicon Valley is so strong that the Canadian companies want to be there and gain venture capital funding.

    5) What are some of the trends happening on the Canadian VC scene?

    Venture Capital funding in Canada has significantly risen over the past few years. In 2012, Canada has reached its highest point in VC funding since 2006. An increase of 6% can be seen in the information technology sector, which is significantly important to innovation and growth. The Information Technology sector continues to gather 45% of all venture capital investments.
    As of quarter 3 of 2013, venture capital funding has increased both in number investments made towards different companies and the total amount of funding available. From the months July to September, venture capital funds had a total of $541 million compared to $366 million in the same period of last year.

    References:
    “CNW Group.” CVCA. http://www.newswire.ca/en/story/1267231/canada-s-buyout-private-equity-venture-capital-markets-in-q3-2013-venture-capital-investment-up-sharply-buyout-pe-deal-making-down-slightly (accessed November 25, 2013).

    “Canada’s Venture-Capital Activity Shows Strong Growth.” Canada Real Time RSS. http://blogs.wsj.com/canadarealtime/2013/11/25/canadas-venture-capital-activity-shows-strong-growth/ (accessed November 25, 2013).

    “Canada’s Venture Venture Capital Capital Market in 2012.” CVCA. http://www.cvca.ca/files/Downloads/VC_Data_Deck_2012_Final.pdf (accessed November 25, 2013).

    “Venture Capital Action Plan.” Home. http://actionplan.gc.ca/en/initiative/venture-capital-action-plan-0 (accessed November 25, 2013).

    “Venture capital returns.” Canadian Business. http://www.canadianbusiness.com/sponsored-information-feature/exchange-insights-from-tsx-tsxv/venture-capital-returns/ (accessed November 25, 2013).

  4. Adrian Lawrence says:

    1) The Economic Action Plan 2012 announced $400 million in new capital over the next 7 to 10 years to help increase private sector investments in early-stage risk capital. This in turn will support the creation of large VC funds led by the private sector. The government conducted an extensive analysis to identify the structure that will best support and contribute to the creation of a sustainable private venture capital sector in Canada. Specifically, $250 million allocated to establish new private sector national funds partnered with strategic investors, $100 million to reinvest in existing private funds partnered with willing provinces, $50 million investment in 3 to 5 existing Canadian venture capital funds and other resources that will support the continuation of the development of a strong entrepreneurial culture in Canada.

    2) The key funds in Canada are the private independent funds, corporate funds and other private sector funds that account for a combined $380 million (78%) of all dollars invested in the Canadian market. Foreign investors mainly provide the bulk of this percentage. Government sources, retail funds and investments from labor sponsored venture capital corporations were responsible for the majority of the remaining investment.

    3) U.S venture capital firms raised over $4.1 billion from 56 funds during the third quarter of 2013 (NVCA, 2013). The local U.S venture capital market supplies a large majority of investment in the American market. The top venture capital funds were lead by Massachusetts-based Greylock and California-based Sequoia Capital U.S Venture Fund, which raised $1.0 billion and $552.9 million respectively. One of the largest new funds was Drive Capital Fund that raised $181 million.

    4) US VC funds are responsible for a larger majority of investment in their own market than Canadian VC funds in the Canadian market. The size of the US VC market is larger its Canadian counterparts. According to Industry Canada, there is a much greater dependence on government participation through both direct financing and provision of tax incentives in Canada than in the U.S. Private independent funds play a more dominant role in the U.S and more limited in the Canadian market.

    5) Venture capital investment has been more evenly distributed across sectors compared to last quarter where 63% of deals went to information communication technology companies. Canadian VC fundraising activity fell once again and of the capital raised to date more than 53% has been by retail venture capital. Although there were fewer deals completed than last year, this resulted in larger average deal sizes. Trends are following the U.S tendencies, as there is an increase in investment from private independent funds and corporate funds.

    References:

    Industry Canada – SME Research and Statistics
    http://www.ic.gc.ca/eic/site/061.nsf/eng/00178.html

    Canada’s Economic Action Plan – Venture Capital Action Plan http://actionplan.gc.ca/en/initiative/venture-capital-action-plan-0

    Industry Canada, Venture Capital Monitor http://www.ic.gc.ca/vcmonitor

    OECD 2012, ‘Canada’, in Financing SMEs and Entrepreneurs 2012: An OECD Scoreboard, OECD Publishing. http:://dx.doi.org/10.1787/9789264166769-6-en

  5. El says:

    1) What are the overall goals and mechanisms of the Government of Canada’s Venture Capital Action Plan announced in its Economic Action Plan 2012 ?
    The goals of the Venture Capital Action Plan are to boost investments in high-potential new (Canadian) businesses so that these businesses can survive the pitfalls of start-up-hood to become lasting Canadian companies that can compete with the ‘big boys’ (i.e. American, European, Asian etc. companies) They want to strengthen the venture capital industry in Canada, so that Canadian companies have the chance to get good Canadian investments, in the hopes that this extra capital will ensure that these new businesses have the chance to grow and thrive. The mechanisms for achieving this are to give money ($400 million’s worth) towards the encouragment and development of our venture capital industry in the private sector, as well as to help create big funds of venture capital as a resource to Canada’s private sector, especially young companies that need a little help to get through the first bit of their life, but that have potential to be big and successful, provided they get the support they need from venture capital.
    2) What are the key VC funds in Canada?
    The key VC funds in Canada are as follows: foreign funds, private independent funds, LSVCC/Retail, Institutional, Government, and Other.
    3) What are the key VC funds in the US?
    There are a wide variety of firms that provide VC funding in the US, including East Gate Capital Management, Heartland Ventures, Azure Capital Partners, Housatonic Partners, and many more.
    4) How would you characterize the Canadian VC funds versus the US VC funds?
    There is, if internet searching is anything to go by, much more of a move in Canada to fund VC via the government than in the US. This is no surprise, really, as Americans typically operate in a privatized, non-government way when it comes to funding. (There’s a class at Carleton that touches on this, about Management of the Arts. America, compared to Canada or Europe, has a lot less government funding, but many more independent investors.)
    5) What are some of the trends happening on the Canadian VC scene?
    Following the millenium, there hasn’t been a positive outlook for the Canaadian VC scene, especially in the tech sector. It was stagnating, at times even dropping. This may change, however, as the government has started to invest more heavily in the Canadian business sector. So far, things seem to be perking up a bit, as a result of the influx of capital, but there’s still a long way to go.
    Source: (in addition to those you provided) http://www.entrepreneur.com/vc100

  6. Zach Lahartinger says:

    1) What are the overall goals and mechanisms of the Government of Canada’s Venture Capital Action Plan announced in its Economic Action Plan 2012 ?

    The purpose and focus of Canada’s Venture Capital Action Plan is to invest 400 million in the next 7 to 10 years in venture capital growth. Since the tech bubble burst, venture capital returns on investment have dropped significantly, reducing the amount of capital provided by large firms for new growth companies. Canada’s economic action plan suggests that we invest that 400 million as followed;

    1) Investing 250 million in a new privately led national fund, which would actually consist of several venture funds.
    2) 100 million to re-up existing large private sector funds
    3) The last 50 million will be allocated to 3 – 5 existing high performance privately held funds.

    2) What are the key VC funds in Canada?

    There were 4 high growth funds selected by the Venture Capital Action Plan to receive that for mentioned 50 million. These 4 funds are stated in the Q2 venture capital monitor, produced by the government of Canada, and are as follows:

    1) Summerhill Ventures II
    2) CTI Life Sciences Fund II
    3) Real Ventures Fund III
    4) Lumira Capital II

    These four firms were recognized by the government as high performance and to be the most likely to stimulate and create jobs in our economy. (http://www.ic.gc.ca/eic/site/061.nsf/eng/h_02848.html)

    3) What are the key VC funds in the US?

    Some of the largest VC’s in the states are recognized yearly by Forbes magazine, which does an in depth analysis. To compare with Canada I will name the US top 4 Venture Capital firms as described by Forbes (http://www.forbes.com/sites/tomiogeron/2013/05/08/the-top-ten-in-venture-capital-today-midas/)

    1) Accel Partners: Earining their claim to fame with an early entry into Facebook, purchasing an 11% share in the company for 12.7 million. This return today translates in the hundreds of millions.
    2) Andreessen Horowitz: With early investments in Twitter and LinkedIn, both companies doing very well.
    3) Sequoia Capital
    4) Greylock: early investments in Facebook and Groupon.

    4) How would you characterize the Canadian VC funds versus the US VC funds?

    Canadian Venture capital investment does not even come close to the scale of investment in the US. That being said in this past year, comparing 2012 to 2011, Canada has remained even with investment, investing roughly 1.5 billion in around 400 companies. Though there was no major increases this marks up against the US 10 % decline from 29.5 billion in 2011, to 26.6 billion in 2012. Not only was there a decline in capital invested, the total number of firms invested in also dropped by about 5% (http://www.cvca.ca/files/Downloads/VC_Data_Deck_2012_Final.pdf).

    Though I would say the states has a much larger and stronger Venture Capital market, the numbers have proved in recent years Canada is doing better. I can only speculate that the 400 million being invested in the next 7-10 years will also ensure that growth, or at least par, to continue.

    5) What are some of the trends happening on the Canadian VC scene?

    I would say the biggest recent trend in Canadian Venture Capitalism is called micro-financing. Micro financing is when a company receives a series A round of financing of $100,000 or less. As a venture capital firm, investing such a small amount gives you a shotgun approach to investing in many companies. There are risks associated with this type for financing however, as most companies being invested in, are much more volatile than traditional VC backed.companies.

    Another common trend in the VC seen we are beginning to see is the investment in green technology. (www.ic.gc.ca/vcmonitor) in Q1 and Q2 of 2013 investment in green technology has been higher than previous quarters. I believe this points towards a more socially conscience society, investing in technologies that will better our ecological state.

  7. David Mina says:

    1)
    The Venture Capital Action Plan has as its main goal to promote Canada’s economy. The government believes this can be accomplished by providing financial support to small and medium businesses that have high growth potential – especially businesses that focus on innovation. (Action Plan 2013)
    The Economic Action Plan includes $400 million that will serve as investment for the private sector in early-stage risk capital and to support the creation of large scale venture capital funds led by the private sector. This large investment is expected to attract $1 billion in new private sector investments in fund of funds. (Action Plan 2013)
    The breakdown of how the funds made available by the Ventura Capital Action Plan are as follows:
    Amount (million) Action
    $200 Establishing new, large private sector-led national funds of funds
    Up to $100 Recapitalizing existing large private funds of funds
    $50 Investing in 3 to 5 existing and high-performing venture capital funds in Canada

    In general, however, Canada’s Economic Action Plan is a project led by the Government of Canada that encompasses three major goals. 1) to create more jobs, to foster 2) economic growth through innovation, and 3) prosperity. (Action Plan 2013)
    Goals Mechanisms
    Creating more Jobs Connecting Canadians with Available Jobs (Action Plan Jos 2013) is the first mechanism the Government of Canada is using in order to create more jobs in the country. The initiative includes enhancing labor market information such as job postings; this is being done with the hopes of enhancing the way individuals search for jobs. (Action Plan Jos 2013)
    Also, another task is to clarify definitions such as “suitable work” and “reasonable job search” for Employment Insurance claimants; for instance, the definition for suitable employment is now to be established by looking at several factors such personal circumstances (health and physical capabilities) , working conditions and wages (unsafe conditions and lower than minimum wage), commuting time (acceptable commuting time e.g. one hour), and hours of work (part-time, shift work, etc.). (Action Plan Jos 2013) Further, the Government’s initiative also include making improvements to the way individuals from the Temporary Foreign Worker Program and the EI program to ensure Canadians are considered for jobs before temporary foreign workers. (Action Plan Jos 2013)Finally, the Government is committed to work closely with provinces to provide skill training and job search support to EI claimants early in the claims. This last step is accomplished through Labour Market Development Agreements (Government of Canada 2013).

    Youth Employment Strategy (Action Plan 2013) is the second mechanism the Government of Canada is using to ensure they create more jobs. This project’s main goal is to help young individuals to join the workforce after they finish their studies in the smoothest possible way. One way this objective is being accomplished is by offering paid internships for recent post secondary graduates (Action Plan Jobs 2013). Further, evidence was found clarifying that teaching professionals endorse the idea of internships. (Adams 2013)
    Moreover, YES is the Government of Canada commitment to help young individuals. Especially, those who have difficulty to join the workforce. (Action Plan Jos 2013)

    Support for Workers and Unemployment (Action Plan 2013) is the third mechanism the Government is using to create more jobs. This strategy consist in providing the necessary tools so that employers can find the right candidates for their vacant positions in a timely and effective and efficient manner. Under this strategy, the Government is providing skill training, apprentices, continuing education programs(such as apprenticeships Completion Grants), international education strategy, pathways to education in Canada, post-secondary education for First Nations and Inuit Students, etc. Further, the focus for this project is on the following groups; youth, persons with disabilities, aboriginal people, older workers and new comers. (Action Plan Jos 2013)

    Working in Canada Tools (Action Plan Jos 2013) is the last strategy being used by the Government of Canada to create more jobs and to ensure employers and individuals looking for work can find each other. Under this strategy we find a website where employers can post their available positions and individuals can search for the jobs they want, in the field they prefer and in the locations they considered to be suitable for them. (Working in Canada 2013)

    Fostering economic growth through innovation Advanced Research (Action Plan Growth 2013) Canada’s Economic Action Plan is providing additional resources to support advanced research in universities and other leading research institutions. It is through innovation, modernization, forward thinking, and world-leading research advancements that Canada will be able to capitalize on new opportunities in the 21st century economy and bring jobs and prosperity to our county. (Action Plan Growth 2013) This initiative encompasses a variety of industries an strategies such as supporting the manufacturing industry by lowering their taxes in order to strengthen the competitiveness. (Action Plan Growth 2013) Also, providing fund to build more equipment for the Canadian Armed Forces, for the Canadian Innovation and Commercialisation program, the Federal Economic Development Agency for Southern Ontario, and the National Shipbuilding Procurement Strategy. (Action Plan Growth 2013)

    Business Innovation – Aerospace (Action Plan Growth 2013) provides funding to foster the Aerospace industry in Canada which directly employees 66,000 people around the country in high quality jobs.

    Small Business (Action Plan Growth 2013) Canada’s innovative small- and medium-sized businesses transform new discoveries into advanced products and technologies, bridging the gap between research and the marketplace. Recognizing their essential role in creating jobs, the Economic Action Plan includes many initiatives to help small businesses succeed in today’s economy. Some of this initiatives include; acceleration the adoption of information and communication technologies, Canada small business financing program, reducing taxes for small business, among others.
    Fostering Prosperity Across Canada Canada has one of the most prosperous and competitive economies in the world. (Action Plan Growth 2013) The Government of Canada is focused on enabling the prosperity of all Canadians across the nation.
    Some of the initiatives include Tax and pension reforms, support for small businesses and infrastructure priorities that will help further strengthen the economy. (Action Plan Growth 2013)
    The Government is committed to helping Canadians by
    • Supporting individuals and Families
    • small businesses, and
    • communities and regions.

    2)
    The following is a list of the most active VC investors. Please note that Business Development Bank of Canada and Export Development Canada are both government organizations who are part of the investors. (TECHVIBES 2009)
    Venture Capital Investor
    Business Development Bank of Canada –
    GrowthWorks Ltd. –
    VenGrowth Private Equity Partners –
    Fonds de solidarité FTQ –
    Yaletown Venture Partners Inc. –
    iNovia Capital –
    Ventures West Capital Ltd. –
    Lions Capital Corp. –
    Export Development Canada –
    AVAC Ltd. –
    Covington Capital Corporation –
    Desjardins Venture Capital –
    Multiple Capital Inc. –
    BDR Capital –
    B.E.S.T. Investment Counsel Limited –
    Discovery Capital Management Corp. –
    JLA Ventures Inc. –
    CTI Life Sciences Fund –
    EdgeStone Capital Partners –
    VentureLink LP –
    (TECHVIBES 2009) (Boogar 2013)

    3)
    The following is a list of the Venture Capital Firms from the Unites States that support early-stage businesses: (EntrepreneursVC 2013)
    • East Gate Capital
    • Heartland Ventures
    • Azure Capital Partners
    • Housatonic Partners
    • Azure Capital Partners
    • OCA Venture Partners
    • SAS Investors
    • Alloy Ventures
    • Frazier Healthcare and Technology Ventures
    • New World Ventures
    • Early Stage Partners
    • BV Capital
    • Digital Entertainment Ventures
    • Gryphon Capital
    • Milestone Venture Partners
    • Saints Ventures
    • Windward Ventures
    • Carlyle Group
    (EntrepreneursVC 2013)
    Also, the following are the ten biggest Venture Capital Firms in the Unites States according to InvestorRank: (TechChunch 2013)
    • Andreessen Horowitz
    • Sequoia Capital
    • Accel
    • Benchmark Capital
    • Union Square Ventures
    • General Catalyst Partners
    • NEA
    • Kleiner Perkins
    • Khosla Ventures
    • Greylock
    (TechChunch 2013)

    4)
    There are three main differences identified between the VC funds in Canada and the VC funds in USA.
    1. There are fewer VC firms in Canada than in the USA.
    2. There are more firms in the USA that support early-stage projects in the US than in Canada. (EntrepreneursVC 2013) (Boogar 2013)
    3. The amount of incentives provided by the government of Canada is much larger than the ones provided by the US Government when it comes to VC funding.

    5)
    Growth:
    Canada’s VC market saw significant year-over-year growth during Q1 2013 as $460 million was invested into 138 companies between January and March. In terms of value this represented a 55 percent increase over the $297 million invested into Canadian companies over Q1 2012. (Branch 2013)
    Canadian Investors:
    Moreover Canadian investors invested a total of $364 million in this period, up 66 percent from the $219 million these funds accounted for at the same time in 2012. Government, private independent funds, labour sponsored venture capital corporations (LSVCCs) and other types of Canadian investors were the key contributors to this year-over-year growth. (Branch 2013)
    Government:
    During Q1 2013, the Business Development Bank of Canada (BDC) made VC commitments totalling
    $21.2 million into 20 companies. (Branch 2013)
    From these facts we can conclude that the VC scene in Canada is growing significantly thanks to the investments and commitments the Governments of Canada and some of the provinces in Canada are making

    Works Cited
    Action Plan. 2013. http://actionplan.gc.ca/en/page/want-find-out-where-jobs-are-canada (accessed 11 2013).
    Action Plan Growth. 2013. http://actionplan.gc.ca/en/page/growth-through-innovation (accessed 11 2013).
    Action Plan Jos. 2013. http://actionplan.gc.ca/en/initiative/connecting-canadians-available-jobs (accessed 11 2013).
    Adams, Caralee J. Caralee J. Adams. 2013. http://inspirewisconsin.org/internships-help-students-prepare-for-workplace/ (accessed 11 2013).
    Boogar. 2013. http://www.boogar.com/resources/venturecapital/canada.htm (accessed 11 2013).
    Branch, Small Business. Q1 2013 – VENTURE CAPITAL MONITOR. Quaterly, Industry Canada, 2013.
    EntrepreneursVC. 11 2013. http://www.entrepreneur.com/vc100 (accessed 11 2013).
    Government of Canada. 05 07, 2013. http://www.hrsdc.gc.ca/eng/jobs/training_agreements/index.shtml.
    TechChunch. 11 2013. http://techcrunch.com/2011/05/25/top-10-vc-firms-investorrank/ (accessed 11 2013).
    TECHVIBES. 2009. http://www.techvibes.com/blog/20-most-active-venture-capital-investors-in-canada (accessed 11 2013).
    Working in Canada. 2013. http://www.workingincanada.gc.ca/home-eng.do?lang=eng&utm_source=Want+to+find+out+where+the+jobs+are+in+Canada&utm_medium=Link&utm_campaign=Action_Plan_Skills_Fall_2013 (accessed 11 2013).

  8. 1) As announced in the Government of Canada’s Venture Capital Action Plan in the Economic Action Plan of 2012, the overall goals and mechanisms were to demonstrate Canada’s innovative firms represent superior return opportunities, and that private sector investment and decision making is central to long-term success. In order to orchestrate such a movement, the GOC intends to implement includes investing $250million to establish new, large private sector-led national funds of funds in partnership with institutional and corporate strategic investors, as well as interested provinces. Further the Venture Capital Action Plan also called for up to $100million to recapitalize existing large private sector-led funds of funds in partnerships with willing provinces and an aggregate investment of up to $50million in three to five existing high performing venture capital funds in Canada. Lastly, they also intend to add additional resources to continue developing a robust venture capital system and a strong entrepreneurial culture in Canada. Through these actions they intend to keep high growth firms in Canada and spark investment into these companies to inspire growth during their important periods of growth. (venture capital action plan, 2013)
    2) There are a number of key VC funds in Canada. The top 5 as of 2009 were: (1) Business Development Bank of Canada, (2) GrowthWorks Ltd., (3)VenGrowth Private Equity Partners, (4) Fonds de solidarite FTQ, (5) Yaletown Venture Partners inc. However the following VC funds also participated in multiple deals ranging in investments from $27million to $10million. They include: INovia Capital, Ventures West Capital Ltd., Lions Capital Corp., Export Development Canada, and AVAC Ltd. (Lewis, 2009).
    3) In the US the top 10 key funds in relation to funds ranked on a basis of ‘network centrality’ or in essence on probability and not actual returns (which can be heavily skewed by a small number of investments) include: Andressen Horowitz, Sequoia Capital, ACCEL, Benchmark Capital, Union Square Ventures, General Catalyst Partners, NEA, KPCB, Khosla Ventures and Greylock Partners. (Schonfeld, 2013).
    4) The US venture capital funds are mainly ruled by large investment funds held by private funding investors. However, the major VC funds of Canada are often government supported. The Canadian VC funds rely heavily on the use of taxation credits and government supported initiatives to support growth of high potential small and medium enterprises. For instance, in Canada the Canada Revenue Agency offers Labour Sponsored Venture Capital Corporations (LSVCC) Tax credits. (Government of Canada, 2012). The Canadian government aims to help investment and increase spending to support entrepreneurs, innovators and world class research to stay competitive in this market. The US VC funds are often brought forward by individual investment firms and are not supported as heavily by the government system.
    5) Looking into the future, as the Canadian VC funds moves forward there seems to be an trend leaning towards providing incentives to increase VC funding into companies. The government is committed to a new approach to supporting innovation that focuses resources on private sector needs. This includes providing funding and grants and tax credits to support research, education and training in order to create value-added jobs through innovation. The new approach will promote business innovation through improved support for high-growth companies, research collaborations, procurement opportunities, applied research and risk financing. Through the investments and actions the government plans to carry forward it looks to increase the number of high growth SMEs and attract the VC funds to begin spending and investing more since the economic depression in the late 2000’s (Government of Canada, 2012).
    References Cited
    Government of Canada. “Chapter 3.1: Supporting Entrepreneurs, Innovators and World-Class Research.” Budget 2012 -. N.p., n.d. Web. 24 Nov. 2013. .

    Lewis, Rob. “20 Most Active Venture Capital Investors in Canada.” – Techvibes.com. N.p., 9 Oct. 2009. Web. 24 Nov. 2013. .
    Schonfield, Erik. “The Top 10 VC firms According to Investorank.” Tech Crunch. N.p., 25 May 2011. Web. 26 Nov 2013. .
    “Venture Capital Action Plan.” Canada’s Economic Action Plan. Government of Canada, n.d. Web. 25 Nov 2013. .

  9. Matti Blume says:

    1) The Venture Action Plan, which is a part of ‘Canada’s Economic Action Plan’, is expected to foster growth especially in innovative industries. Canadian companies in that sector should be enabled to become globally competitive, thus creating domestic jobs. 400 million $ of new capital over the next 7 to 10 years should bring an end to the poor funding situation for Venture Capital. By this, another billion CAD of private capital is expected to be raised. The government owned bank BDC is responsible to manage and distribute the existing VC. [“Action Plan”, 2013]

    2) Many canadian VC funds are members of Canada’s Venture Capital & Private Equity Association (CVCA). BDC, with 1 bn CAD is not the biggest investor, but a cornerstone of the canadian VC landscape. Many other VC funds have more or less narrow industry focuses. Other funds over 1 bn CAD are ARC Financial Corp. (3.5 bn CAD; Energy) and Birch Hill equity partner (2 bn CAD). [CVCA, 2013]

    3) The National Venture Capital Association (NVCA) is the US counterpart of the CVCA. Important funds are Sequoia Capital, Accel Partners (8.8 bn USD), New Entreprise Associates (11.0 bn USD), Battery Ventures (4 bn USD) Polaris Venture Partners (3.5 bn USD) [Schonfeld, 2011]

    4) The US VC community is very much centred around internet technology and services. Many Canadian funds, however, have regional or even local focuses, or industry focuses (other than IT). These industry focuses are in accordance to national industry preferences. Also investing personalities play a big role in the US scene. Large deals are recognized as personal achievements of people rather than corporations. [Geron, 2013]

    5) The former strict national separation of VC between the US and Canada has ended. Canadian start-up companies can now reach US VC more easily. This on the other hand poses a threat to the Canadian VC, as they are sometimes perceived to be better. Canadian VC funds try to fight this perception with more professionality. [MacLeod, 2012]

    Sources:
    Venture Capital Action Plan 2013, http://actionplan.gc.ca/en/initiative/venture-capital-action-plan-0, retrieved Nov, 26th 2013

    Canada’s Venture Capital & Private Equity Association (http://www.cvca.ca, retrieved Nov, 26th 2013)

    Erik Schonfeld (May 25th, 2011): The Top 10 VC Firms, According To InvestorRank, on techcrunch.com (http://techcrunch.com/2011/05/25/top-10-vc-firms-investorrank/, retrieved Nov, 26th 2013)

    Tomio Geron (May, 8th 2013): The Top Ten In Venture Capital Today – Midas List, on forbes.com (http://www.forbes.com/sites/tomiogeron/2013/05/08/the-top-ten-in-venture-capital-today-midas/, retrieved Nov, 26th 2013)

    Mark MacLeod (May 28th 2012): The State of Canadian VC… on startupcfo.ca (http://www.startupcfo.ca/2012/05/the-state-of-canadian-vc/, retrieved Nov, 26th 2013)

  10. Trinh Ha says:

    1) What are the overall goals and mechanisms of the Government of Canada’s Venture Capital Action Plan announced in its Economic Action Plan 2012?
    The Government of Canada (GoC)’s Economic Action Plan announced a Venture Capital Action Plan that looked towards trying to support the Canadian venture capital industry by ways of investing $400 million in new capital over the next 7-10 years to help increase the number of private sector investments that are generally in the early-stage risk capital and support the creation of “large-scale venture capital funds” that’s led by the private sector (Canada’s Economic Action Plan). The goal plan is to show that innovative firms in Canada can provide significant return opportunities for venture capitalists and investors, and that controlled decision-making and investment in the private sector is critical to the firm’s success (as with the industry).
    The Venture Capital Action Plan looks towards ensuring Canada’s venture capital industry becomes sustainable after years of constant low returns for investors and that high-potential firms in Canada has access to resources needed for them to grow successfully. The Action Plan is to overall help promote the venture capital industry in Canada and spur investment to the strong entrepreneurial community and create a strong network for VCs and potential innovative companies. The Venture Capital Action Plan looks towards deploying $400 million in new capital by:
    – $250 million to establish new, large private sector-led national funds of funds (a funds of funds portfolio consists of investments in several venture capital funds) in partnership with institutional and corporate strategic investors, as well as interested provinces;
    – Up to $100 million to recapitalize existing large private sector-led funds of funds, in partnership with willing provinces; and
    – An aggregate investment of up to $50 million in three to five existing high-performing venture capital funds in Canada.
    2) What are the key VC funds in Canada?
    Some of the key VC funds in Canada are:
    a. GrowthWorks Working Opportunity Fund – allowing investors in the fund to have the opportunity to participate in early equity ownership to British Columbia (BC)’s fast growing companies specializing in IT, life sciences, and cleantech sectors (GrowthWorks, 2013).
    b. GrowthWorks Commercialization Fund – allows investment in small to medium-sized Canadian firms with significant commercialization potential (GrowthWorks, 2013)
    c. Ontario Venture Capital Fund (OVCF) – a fund set up jointly by the Government of Ontario and leading institutional investors such as TD Bank, Manulife Financial, Business Development Bank of Canada, etc to primarily invest in Ontario-based and focused venture capital and equity growth. Supporting innovative and high-growth companies with the primary objective of the fund to generate attractive returns for its investors.

    3) What are the key VC funds in the US?
    Some of the key VC funds in the US are (Venturebeat.com, 2013):
    a. Greylock Partners– Headquartered in Silicon Valley with over $2 billions of committed capital, it focuses on the early stage companies in consumer, enterprise softrware, infracstructure, and semi-conductor sectors.
    b. Sequoia Fund Inc – focuses on providing investment primarily in common stocks that are currently undervalued at the time (invested) but have the potential for growth in the near future. Usually investing in cash reserves in US Government Securities.
    c. Venture Capital Fund of America III, Inc – providing liquidity to its private equity investors located in US.

    4) How would you characterize the Canadian VC funds versus the US VC funds?
    The Financial Post has recently reported as to why many Canadian (start-up) firms are more likely to prefer to take American investment over Canadian investment in “Why Canada’s tech entrepreneurs prefer American backers” by Quentin Casey and Canadian startups turns to foreign sources where local funding fails: study” by Matthew Braga. Both recent reports suggest that Canadian (tech) start-ups seek for foreign investment due to a variety of factors such as the limited and lack of funding in Canada available for start-ups, the desire to acquire foreign investment in order to reach out beyond the Canadian market, acquire quality resources, gain the image and backing of a large known VC and so forth. In studying Canadian VC vs American VC, there is a generalized perception that Canadian Vcs tend to invest in a broad range of opportunities whereas US VC are more heavily focused on the certain type of investments they make. Meaning that US VC that invest in a particular start-up will typically have more knowledge of the sector than a general VC. And Canada is having particular troubles over the recent decade in creating a healthy and sustainable investment environment in Canada. It is also stated that US investors tend to be more “aggressive” and actively help your business grow whereas Canadian Vcs are tend to sit around and watch the invested start-up try to grow (investing little time personal, committed time to help the start-up).

    5) What are some of the trends happening on the Canadian VC scene?
    Some of the trends that is happening in the Canadian VC scene is that we are finally starting to see shift in the way Canadian venture capitalists are working. And this is partially due to the help of the Canadian government and its Economic Action Plan in the Venture Capital Action Plan, trying to help grow private sector investments in Canada and allow Canadian start-ups to be able to consider Canadian investment especially in equity based venture capital.

    References
    Canada’s Economic Action Plan – Venture Capital Action Plan http://actionplan.gc.ca/en/initiative/venture-capital-action-plan-0
    Matthew Braga. “Canadian Startups turn to foreign VCs where funding fails: study” Financial Post. May 28, 2013. http://business.financialpost.com/2013/05/28/canadian-startups-turn-to-foreign-sources-where-local-funding-fails-study/?__lsa=37c9-c697
    Quetin Casey. “Why Canada’s tech entrepreneurs prefer American bankers” Financial Post. July, 21, 2013. http://business.financialpost.com/2013/07/21/why-canadas-tech-entrepreners-prefer-american-backers/?__lsa=37c9-c697
    Greylock Partners – http://www.greylock.com/about
    GrowthWorks – Commercialization Fund http://www.growthworks.ca/funds/ontario/gw-commercialization-fund/about-the-fund.asp
    GrowthWorks – Working Opportunity Fund
    http://www.growthworks.ca/funds/british-columbia/working-opportunity-fund/about-the-fund.asp
    VCFA Group http://www.vcfa.com/
    Prime Minister of Canada – Venture Capital Action Plan http://www.pm.gc.ca/eng/news/2013/01/14/venture-capital-action-plan

  11. Rebecca Buvari says:

    1. Recognizing a need, Government of Canada’s Venture Capital Economic Action Plan 2012 announced that CAD 400 million will be dedicated to help increase the private sector. There are four main objectives of the action plan and the money will be divided as following: $250 million will be utilized for establishment of funds of funds portfolio for the new private sector; Up to $100 million to refurbish the current funds of funds for the already existing private sector in willing provinces. An investment of up to $50 million will be invested in up to five existing venture capital funds that are high-performing within Canada. The last goal is to invest any additional resources to continue the development of a strong capital system as well as the entrepreneurial culture in Canada.

    2. VCAP, Venture Capital Action Plan, BDC Venture Capital, Blackberry Partner Fund, Celtic House Venture Partners, DRI Capital, Golden Opportunities Fund Inc.

    3. The National Venture Capital Association, where 56 funds raised $4.1 billion for VC, Eastgate Capital Management, Azure Capital Partners, Heartland Ventures.

    4. One main difference between the US and Canada is the fact that the Canadian taxation scares VC investors. Much of the VC investment in Canada goes towards technology based companies. Canada also offers labor unions that sponsor the investment funds as well as tax breaks for new ventures. It is found that the VC investment in the US has, in fact decreased in the US in 2013 compared to the same period in 2012. Whereas Canada are dedicating more funds to VC.

    5. The Private sector is increasing and people are choosing to start their own firms. The government has realized that it is vital to invest in these firms in order to drive the country forward and for Canada’s industry and private sector to evolve. Thus they are choosing to invest more funds as Venture Capital.

    http://actionplan.gc.ca/en/initiative/venture-capital-action-plan-0
    http://www.techvibes.com/blog/venture-capital-funding-outlook-in-canada
    http://www.cic.gc.ca/english/immigrate/business/start-up/eligibility/entities.asp
    http://www.bdc.ca/EN/solutions/venture_capital/Pages/venture_capital.aspx?ref=shorturl-vc#.UpWR08RWySo

  12. Uynghiem says:

    What are the overall goals and mechanisms of the Government of Canada’s Venture Capital Action Plan announced in its Economic Action Plan 2012 ?

    Overall Goals:
    • Contribution into sustainable private VC Sector
    • Need to recognize innovative firms that provide superior returns
    • All decisions are central to the private sector and are successful
    • Establish strong entrepreneurial culture and create well establish networks to connect investors to innovative firms.
    • Develop a robust venture capital system
    Mechanisms
    • 250 Million Dollars to create new private led VC firms in partnership with external investors and provinces
    • Reinvest $100 Million Dollars into existing private sectors
    • Support high performing firms with addition $50 Million dollars
    • Additional resources allocated to the VC system

    2) What are the key VC funds in Canada?

    Top 4 High performing VCs:
    Summerhill Ventures II
    CTI Life Sciences Fund II
    Real Ventures Fund III
    Lumira Capital II
    3) What are the key VC funds in the US?

    California Public Employees’ Retirement System (CalPERS)
    HarbourVest Partners Private Equity Fund of
    AT&T Pension Fund Private Sector Pension
    Adams Street Partners Private Equity Fund of
    Hewlett Packard Pension Fund
    4) How would you characterize the Canadian VC funds versus the US VC funds?

    Canadian VC Funds are diverse over a large portfolio and range in variety of number of fields such as biotechnology, environmental programs, development of medical technology and other variety of long-term investments that already show a business model and proven revenue. US VC funds based off popular media and current trends focus on short-term gains and hyper saturation of consumers. Large VC funding goes into social entrepreneurship and their technologies such as Facebook, Snapchat, Yahoo!, & Twitter. Even though some of this large platforms with huge following have no revenues at all.
    5) What are some of the trends happening on the Canadian VC scene?

    The Canadian VC is accelerating at a fast pace with many incubators starting up to host many new ventures. Large investments are support many young entrepreneurs such as Investottawa. In recent, years local and national support for Canadian firms to succeed was promoted by the elected government to create jobs. Large trend of unemployed professionals have recently became entrepreneurs in light of their situation and benefits that many programs offered in Canada. With this becoming a trend, many of these self-employed individuals are able to create a sustainable business and lifestyle, aswell as a rewarding career. Canadian VC scene mainly focuses on sustainable and global innovations.

    References

    Prequin, October 2013. “Preqin Special Report: US Venture Capital Industry” New York.
    https://www.preqin.com/docs/reports/Preqin_Special_Report_US_Venture_Capital_Oct_13.pdf Accessed November 27th, 2013

    Canada’s Economic Action Plan – Venture Capital Action Plan http://actionplan.gc.ca/en/initiative/venture-capital-action-plan-0

    Industry Canada, Venture Capital Monitor http://www.ic.gc.ca/vcmonitor

    OECD 2012, ‘Canada’, in Financing SMEs and Entrepreneurs 2012: An OECD Scoreboard, OECD Publishing. http:://dx.doi.org/10.1787/9789264166769-6-en

  13. Zhou Li (Louis) says:

    1. The goal of the plan is to encourage the creation of large venture capital funds that specialize in investing in early-stage, high-growth startup companies in Canada; to improve access to venture capital financing by high-growth companies so that they have the capital they need to create jobs and growth; and to deepen the pool of experienced fund managers in Canada.

    The Venture Capital Action Plan will make available: $250 million to establish new, large private sector-led national funds of funds (a funds of funds portfolio consists of investments in several venture capital funds) in partnership with institutional and corporate strategic investors, as well as interested provinces; up to $100 million to recapitalize existing large private sector-led funds of funds, in partnership with willing provinces; and an aggregate investment of up to $50 million in three to five existing high-performing venture capital funds in Canada.

    2.
    Canada Top 5
    1. Business Development Bank of Canada
    2. GrowthWorks Ltd
    3. VenGrowth Private Equity Partners
    4. Fonds de solidarité FTQ
    5. Yaletown Venture Partners Inc

    3.
    US Top 5
    1. Andreessen Horowitz
    2. Sequoia Capital
    3. Accel
    4. Benchmark Capital
    5. Union Square Ventures

    4. The US VC industry is relying on original VCs who were operators for the most part, with experience in “anchor” companies like Intel, Apple, Honeywell etc. They were, by and large, bankers and lawyers. Without the “anchor” companies in existence already, such as they were in the Silicon Valley, it was very hard to find talent at every level in Canada. Oftentimes, the good ideas funded in Canada were quickly caught and passed by the US companies that could get more access to the capital from the more established and larger US VCs.

    Moreover, the angel/VC relationship in Canada was always poor from the beginning, which was the opposite in the US and still is today. While US VCs are well-known as their aggressiveness and cash heavy strategy, Canadian VCs typically do not have deep pockets, and thus become more conservative when it comes to investing.

    5. Canadian VC market trends
    VC investment activity in Canada steered a steady course in 2012, matching levels of dollars invested in 2011, and showing moderate year-over-year expansion in the number of innovative company financing. The Canadian market also saw significant growth in VC, fund-raising activity in 2012.

    VC invested across Canada totaled $1.5 billion last year which, according to Thomson Reuters’ data, is the same amount that was invested in 2011. Dollar flows in both 2012 and 2011 are the highest recorded since 2007, the most active year of the previous VC invested in 2011. Dollar flows in both 2012 and 2011 are the highest recorded since 2007, the most active year of the previous VC market cycle. Year-end results were supported by a total of $321 million invested in Q4 2012, though this activity was down 15% on a year-over-year basis.

    In 2012, deal sizes benefited from an array of major financing, including the $80 million financing of Kitchener’s Desire2Learn Inc., the $50million financing of Calgary’s Engineered Power Inc., the $35 million financing of Vancouver’s D-Wave Systems Inc., and the $35 million financing of Montréal’s Thrasos Innovation Inc.

    Sources:
    Canada’s Economic Action Plan – Venture Capital Action Plan http://actionplan.gc.ca/en/initiative/venture-capital-action-plan-0

    Industry Canada, Venture Capital Monitor http://www.ic.gc.ca/vcmonitor

    http://www.cicsimmigration.com/canadian-government-to-provide-400-million-to-bolster-domestic-venture-capital-industry/

    VC Investments Q3 ’13 – MoneyTree – Top Deals http://www.nvca.org/index.php?option=com_content&view=article&id=344&Itemid=103

    http://business.financialpost.com/2013/07/21/why-canadas-tech-entrepreners-prefer-american-backers/?__lsa=df70-3659

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