Gap With U.S. Has Closed Disbursements 1995-2001; Canada & U.S. $ Invested by Canadian VCs - $ Billions $ Invested by US VCs - $ CDN Billion
Less $ to Big Deals Drives Decline $ Invested by Transaction Size; Atlantic Region $33M $23M $48M $53M $75M $53M
Technology Almost Exclusive Focus Disbursements in Canada $1,089M $1,774M $1,751M $2,986M $6,629M $4,874M
Capital Markets Playing Field Concept Investigation Basic Design Prototype Building Market Entry Manufacturing Ramp-up Knowledge Acquisition Government Programs Public Issues Commercial Banks Non-Financial Corporations Venture Capital Funds Seed Funds Wealthy Family Funds Private Investors Faminly and Friends Personal Savings Phase I Phase II Phase III
Implies having a well defined business model that says, “I know who my customers are, what they need, how I will meet their needs, how I will reach them, how I will service them, how I will continue to best my competition and how I will make money.
Financing based on “Napkin” business plans is “out”
Fundamentals are back “in”
Companies must show more evidence of market acceptance of product, value proposition and business model before funding
Tough with no sales
Valuations are down 50-75%
V.C.’s are staying closer to home
Investors Active in Atlantic Canada ACF Equity Atlantic Inc. BMO Capital BDC Venture Capital Group Canadian Science and Technology Group Roynat Manulife EDC CDP – Accés Capital CDP - Sofinov Genesys Capital Partners Latitude Partners Ventures West Management Inc ETSIF Skypoint RBCP.