Wednesday, May 28, 2008

Where Do Old VCs Go?

A while back I speculated on the activities of Mclean Watson, once one of Toronto's more active VC funds. The partners had been involved in the formation of a capital pool company and, I speculated, would be using the public markets to generate some near-term high risk returns.

Sure enough, last week Echelon announced that it had entered into a letter of intent to enter into a "qualifying transaction" with MBVax Bioscience. If the transaction is completed, Echelon holders will have the benefit of a private to public "lift" in the price of their original shares plus whatever market value MBVax can generate in the markets. We're seeing more and more high risk investors use the capital pool company program to create a quasi-venture capital portfolio with later stage companies like this. Interesting times.

1 Comments:

Blogger Jonas said...

Interesting indeed.

Here is a link to the press release, which outlines some more of the transaction's mechanics:

http://www.streetinsider.com/Press+Releases/Echelon+Capital+Corporation+Announces+Proposed+Qualifying+Transaction/3686258.html

11:43 PM  

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