State of VC in five years?

Canada has a great financial sector, a growing economy, tons of smart people and a bunch of pretty snazzy exits recently. Yet, with all this Deloitte and the National Venture Capital Association still predict that the number of VC firms in Canada will continue to decline (hat tip: TechCrunch).

Sure, Canada is doing better than US and Europe but we’re not doing so well versus the BIC. The first reaction may be that it is now conventional wisdom that China, India and (lately added) Brazil will take over the world so it stands to follow more VC will set up in those countries. Fair enough.

But deconstruct this a little further. The Canadian VC industry has already been decimated over the course of the past few year and yet, according to this survey, over a quarter of the respondents think it will shrink further. (The VC industry’s shrinkage in the US is a good thing I and many other would argue. Too much dead weight)

And VCs follow exits, well recently Canadian companies have exited to Apple, Google and not to mention a pretty killer IPO. That should bode well for the VC industry over the next five years, but it appears that it doesn’t (Yes, these exits happened after the survey was held, but still….)

In fact, it seems that achieving exits in Canada is the number one barrier to expanded investments in the minds of VCs when they think about Canada. Number 2 barrier is “lack of established venture capital community” which seems like a bit of a vicious circle.

So what do you think? Should Canada be worried? What can be done to improve the five-year outlook on the Canadian VC scene?

Russia learning from Silicon Valley

While everyone in Quebec and Ontario were doing the shake-rattle-and-roll, the Silicon Valley establishment was playing host to Russia’s President Medvedev.

Apparently having your economy rely solely on exporting oil and mafia dons isn’yt considered sound economic policy so Medvedev got his buddy Ivan Danko to show him around the at likes of Twitter and Cisco.

In case you’ve been living in Siberia and haven’t heard, Russia wants to build its own Silicon Valley from scratch in a town outside of Moscow. So we guess Medvedev was asking around for the “how to” manual.

This reminded us of a brief discussion we had over at the C100 website a few weeks back. You can check out the comments over there, but we’ve also reposted here to continue to spur a bit of debate…

Does Canada need its own Silicon Valley?

Tuesday, June 1, 2010 at 03:37AM

OK, I’m going to pull the pin and lob a rhetorical grenade to get a discussion going…

Have you head of Skolkovo, Russia? No? Apparently it is somewhere near Moscow and is the future home of Russia’s Silicon Valley. What? You don’t believe it? Well some US investors sure do, to the tune of $250 million. And this isn’t the only government backed innovation center that is being built from the ground up. There may be a Silicon Valley being built up in Russia but the Dubai has its sites firmly set to be the 21^stSilicon Oasis. Century’s

Both these locations have or are attracting talented engineers. Both of these locations have or are attracting massive amounts of capital.

And they aren’t the only two countries that are trying to build their own flavor of Silicon Valley. There are probably a dozen similar projects in a dozen countries around the world. But one country that isn’t embarking on its own Silicon Valley master plan is Canada.

If a US PE can come up with 250 million reasons why Russia will successfully build the next hub of innovation, surely Canada, with its improving investment climate and its refreshing lack of mafia domination could convince investors to put some green in the Great White North.

Is Canada missing the boat? Does it need to create a chilly Silicon Valley somewhere near Alert in order to compete in the global high-tech market?

Discuss…..

Cisco looking for Canadian innovation

We understand that the good people at Cisco are poking around up North for some start-ups to play a role in the company’s expanded focus into the datacenter, virtualization and smart grid markets.

These are key new markets for Cisco and clearly they want to know what the most innovative start-ups are up to (isn’t the hunt for innovation why all leading companies come poking around here?)

Cisco’s got a few criteria (big companies love their processes!) but it should be pretty easy. To summarize: :

1) Companies must be active in the datacenter, virtualization or smart grid markets

2) Must have existing VC investment

3) Ready/able to take their business to the next level

4) VC-pitch PowerPoint will be accepted only. (they can’t review websites, datasheets or whitepapers)

The people doing the poking are Cisco’s Corporate Development team, who are responsible for investment, acquisition, strategy and partnerships for the company. So if any of these options sound appealing to you, forward your slides to Tab Borden of the Canadian Consulate < Tab.Borden@international.gc.ca>