Tuesday, October 07, 2008

Who Really Controls Start-Up Funding in Canada?

You'll notice that Ian Carew of TD Capital Private Equity Partners will be speaking this week at Ottawa's Venture Capital Fair. The topic? The role of government led fund-of-funds in Canada's innovation and risk capital communities. I recommend that any of you nearby drop in and snuggle up as close as you can to Ian, because as far as I can determine, he and his group at TD Capital control the lion's share of the money (outside of Quebec) that is available in the near term for start-up growth in Canada.

How did this happen? In 2005, the CPP Investment Board gave TD $400 million to manage. $250 million was to be invested to a Canadian small and middle market buyout fund of funds and the remaining $150 million was to be invested in Canadian venture capital funds. Then this June, TD was selected by the Ontario government to manage its $205 million Innovation Fund.

The result? TD Capital holds the keys to the kingdom for any Canadian venture fund looking for money to invest. Of course, there other institutions that invest in venture funds as limited partners; however, many of those limited partenrs are waiting out the currrent market and allowing government money to lead.

Who TD backs will in many ways determine the course of high tech innovation locally for the next few years. Will money be directed to cleantech and healthcare -focused funds only? Or will there still be funds made available for VCs who want to invest in other high tech spaces? Stay tuned.

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