Whither Goest Venture Money?

Prior to some recent business travel, we had amassed a collection of documents to read and analyze on the road. One of those documents was a recent report issued by the CVCA who have delivered some startling news about the status of VC activity in Canada;

  • Venture capital investment in the US has increased by 17%, from 0.18% to 0.21% of GDP
  • Venture capital investment in Canada has decreased by 35%, from 0.13% to 0.085% of GDP
  • And investment by Canadian funds in Canada has decreased from 0.10% to 0.060% of GDP, a 40% drop.

Follow the money

It seems that the early and mid stage investment business has all but dried up here in OHANL. We have been involved with a number of startups over the years and know for certain there is no shortage of great forward looking opportunities, but it is apparent that technology innovation is not a high priority in this country at the federal government level.

Certainly the recent federal budget has spent the vast majority of it’s funds on yesterday’s industries and has done next to nothing for technology creation. While for years we were a technology leader in telecoms, communications, health sciences and other growth areas, in most of these we’ve fallen behind the rest of the world.

Shoulder to the wheel

It was not as though the VC industry sat on their bags of money in the pre-budget process, in fact there was a real buzz about what the industry could influence in the actual budget process. In an open letter to various government folks Wellington Financial LP, a privately-held bridge financing & venture debt fund made an impassioned plea for attention in the budget.

Can you hear me now?

While the budget itself was riddled with nice catch phrases about innovation and words to that effect appear throughout the document alas it’s just that—talk. Technology innovation has always played well in campaign speeches, it’s just too bad it does not translate in to actually encouraging growth in the industry.

What to do?

If you are in the world of technology innovation the best thing you can do is keep the pressure on your MP. Send them a letter with the CVCA analysis paper attached, ask why there are no real incentives for small technology companies and what they plan to do about it?

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One Comment

  1. VC money falls behind in Canada | Shulist Group Inc.:

    [...] had commented on this situation earlier this year, but with the CVCA’s current historical analysis we continue to be [...]

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