Back in August 2007, Heri wrote about changes to early-stage financing in Canada. His thesis is that Canadian investment companies tend to be later stage and much more capital intensive. There doesn’t seem to be the support of new initiatives like seedcamp, Techstars and YCombinator to support early-stage entrepreneurs and venturing. The reduced initial startup infrastructure costs has been covered by Daniel Drouel and Joe Kraus.
I thought I’d start with the CVCA members list (also on Gagglescape) looking at IT investors who explicitly make seed and early-stage deals. Here’s what I could find:
- Aprilis Ventures
- BC Advantage Funds
- BrightSpark
- Celtic House Venture Partners
- Cinnabar Ventures
- Covington Funds
- Discovery Capital
- EdgeStone
- Emerald Technology Ventures
- Extreme Ventures
- Garage Technology Ventures Canada
- Hargan Ventures
- HDL Capital
- Infusion Angels
- Intrepid Equity Finance
- Jefferson Partners
- JLA Ventures
- Pinnacle Capital
- Primaxis Technology Ventures
- Propulsion Ventures
- RBC Venture Partners
- Summerhill Venture Partners
- Skypoint Corporation
- TechCapital
- Telus Ventures
- Trellis Capital Corporation
- VenGrowth
- Ventures West
- Yaletown Venture Partners
There seems to be a disconnect between early-stage tech (or do we mean web) entrepreneurs and investors in Canada. There is apparently money available. There are apparently investable ideas. What is the problem? One of the David’s (David McIntyre or David Berkowitz) at Ventures West suggests that we do too many seed deals when compared to the US and Europe.
Let’s assume that capital isn’t the main issue. Then what is it? Access to talent? Customer acquisition costs? Customer acquisition time frames? Possible exits? I don’t know. Here’s a hypothesis with no data, no research, just ill-informed opinion. A mad guess. Maybe it’s the lack of a web media and advertising stack in Canada. The relatively small Canadian population means that the market is already dominated by Canadian incumbents and US players. Thus making it difficult, though not impossible as StumbleUpon is proving, to build a large enough “local” audience to attract significant advertising dollars. This leaves local players to build their own tools, e.g., OurFaves is a Torstar Digital, or to look beyond our borders for markets, e.g., Kaboose acquired Bounty.com for UK audience. This means that Canadian startups will look more like Freshbooks and less like Facebook or Reddit. I need to spend some more time noodling on this.
BTW did anyone else not realize that BlogTV is a Israeli company.