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Reflections on being a VC in Canada.

It’s almost 15 years now that I have been a Venture Capital investor in Canada.  I started off as a software developer in the 80’s (actually, I started off wanting to live in a socialist utopia on a Kibbutz, but that’s another story). Then I discovered my love of startups and was a serial startup entrepreneur in the first part of my career.

There are two really exciting parts of being a VC. The first is having the opportunity to invest in the best startups in the industry, and the second is, of course, the opportunity to share in the success of these startups.

It is a privilege to be able to invest in the incredible talent, passion and focus of Canada’s leading entrepreneurs as they create the next generation of world-class technology. Nothing in business matches the energy and excitement of a startup that hits the inflection of massive growth.

Our focus has been consistent at Brightspark. Work with great entrepreneurs, apply all the experience we have, help out when asked and needed, try and avoid mistakes previously made, treat all stakeholders with respect, focus on high returns for investors. Its been a pretty successful formula for us – our most recent Brightspark fund has among the highest returns of any tech VC fund in Canada, our investors have made an excellent return, we continue to work with and meet some of the best entrepreneurs in Canada, and some our successes (like Radian6) serve as a great example and motivator to the Canadian industry.

We want to keep doing the same – invest in the best deals in Canada. We want to invest in some of the amazing tech opportunities we are seeing in Canada. We want to capitalize on some of the best quality deals we have ever seen.

The sands are shifting from a “fund of funds” perspective in Canada. While efforts are being made (mostly by government) to stimulate traditional fund of fund investment, funding for the Canadian VC industry remains in crisis.

Now we are starting to see the VC industry starting to take some of its own advice (its called “eating your own dog food”). If the traditional model is not optimal, then make a pivot, take some risks and try new models.

I am confident that within the next five years, equity based crowdfunding will be a major contributor to the industry in Canada. Like many trends in our industry, we are seeing many “flavours” of crowdfunding, be it product crowdfunding (pre-selling products like Kickstarter), consumer crowdfunding (small amounts of investment as being focused on by the OSC), or equity crowdfunding (raising money via crowdfunding).

My fear is that, like with many new “internet economy trends”, we will see iterations that will implode, explode, disappoint and fail (remember the incubator boom in 2000?).

However, I think there are some amazing new equity-based crowdfunding models that will be incredibly successful. The initial successful models will be aimed at accredited investors, with highly curated deals. The opportunity lies in a deep cooperation with a pivoted angel-network, all the discipline of VC led deals in cooperation with a newly energized fund of fund marketplace.

I want to apply everything I have learned about creating startups, growing software companies, and great investment opportunities. Together with a focused market of interested investors, I am excited to start this journey.

 

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