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February 20, 2008
Is Canada the New China for VCs? Or Just the New Colorado?
Granted, it's a tiny market, but with the disappearance of most of the tax-advantaged venture capital firms from the Canadian market it's interesting to see that U.S. venture firms are increasingly driving things. There was 21% growth year-over-year in Canadian venture investment, but that was largely a function of the growing dominance of U.S. VCs in the Canadian market, with such firms now accounting for more than half of investment spending in Ontario, Canadian's largest venture market.
Not to get all inside-VC-baseball, but the numbers are fairly harrowing. If you net out of VC fund-raising last year in Canada the amount raised by Quebec VCs -- which is, let's just say, a highly unusual bit of business -- the rest of the country's VCs cumulatively raised about as much money as my friend Brad Feld's new Boulder-based fund.
Oh well, as one ex-venture guy put it to me, it's a hell of a lot closer for the U.S. guys than having to go to China. And, he added, without the U.S. guys involved a reasonable-sized Series B syndicate would now require the involvement of every firm in the country.
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Thanks for the tip of the hat to the Canadian venture market. There's definitely more activity now than a couple of years ago (including my start-up getting a seed round last September). There was a great article about the booming Montreal Web community in the Montreal Gazette this weekend.