SME Financing Data Initiative
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Growing the Businesses of Tomorrow: Challenges and Prospects of Early-Stage Venture Capital Investment in Canada
IV. Concluding Remarks
All professional managers interviewed for this report – Canadian angels and venture fund managers, as well as American VC industry practitioners – agreed there was a very strong business case for seed, startup and other early-stage investments in the Canadian market, now and in future.
In fact, survey respondents were generally bullish on future prospects for early-stage deal opportunities in Canada, due to a rich innovation system, inherent attributes of firms emerging in technology sector clusters across the country, and an increasingly large and experienced stock of VC investors capable of originating and leading company financings, as compared to less than a decade ago. The believed that by enhancing domestic capacity for undertaking early-stage investments, Canadian industry players could build on the trends highlighted in Section II of the report (Trends in Early-Stage Venture Capital Activity in Canada, 1996-2004), and address key gaps in activity (e.g., deal sizes, activity in certain regions and sectors, etc.).
Along these lines, respondents further indicated that, while specific challenges to early-stage activity certainly exist at present, these can be overcome by more effective partnerships and strategies that will ultimately enhance returns performance, and contribute substantially to Canadian economic competitiveness and prosperity. Above all, they said, industry players must continue to "learn by doing", and develop market infrastructure and practices that support effective commercialization of ideas and inventions, entrepreneurship, and value-added company building.
Of course, industry efforts must be matched by evolution elsewhere in the ecosystem that supports venture activity. In addition, as survey respondents emphasized, growth in VC investment in early-stage activity to new levels relies on improvements in the capital supply conditions underlying the Canadian market as a whole. A VC supply situation that does not see improvements in the near-term, concluded respondents, threatens to undermine or erode progress since the 1990s, and block progress going forward.
