For many years, I've been saying that the current Canadian venture capital ecosystem is fundamentally broken. There are many causes...too many to cover in just one post. And while many valiant efforts have been made to encourage more entrepreneurs and more startups, the money and returns simply haven't materialized as expected. Why is that?
- First, venture funds are still primarily financed by various government entities and public funds. Governments have completely different incentives, and often impose stifling measures on the venture funds that they finance. Relying solely on government sources of capital also makes the entire industry extremely vulnerable in the long term - not good if you're trying to create a sustainable ecosystem.
- Second, no venture funds have really taken any risks. No one has gone out and built a fund that does things differently in Canada. No one is thinking outside of the box.
The kind of meetings that will take place at the QCC will hopefully help to attract and diversify the pools of capital that are available to canadian funds. And they will hopefully encourage conversations that will generate new ideas to turn the industry around.
An area of particular interest to the VC Whisperer at the QCC is the Public Policy Forum on Venture Capital and Innovation. There should be good discussions on the role of incubators and accelerators, on new VC models, and on the role of government. As always, you will find my thoughts here...
Getting investors together is necessary if we want to fix the broken VC ecosystem in Canada.