Q-News Mike's Commentary
November 2010The Times They Are A-Changing*
Posted in Mike's Commentary
As we approach the end of the year it is always
interesting to reflect on what one has accomplished during the past 12 months
and to put serious thought into plans for the next twelve months and
beyond. In early 2006, as we kicked off
Q1 Capital (and put Fusion to bed), it was apparent that a business model based
solely on raising capital for private Canadian technology companies from
Canadian and U.S. VCs was doomed to fail.
With the writing on the wall, we actively began to move away from
financings and refocused our business on providing merger and acquisition
advisory services. Looking back, when I
cofounded Fusion Capital there were over 55 venture capital firms in Canada
looking to finance technology companies and there was
Commentary for September 2010
Posted in Mike's Commentary
Bridgescale Partners continued to make its presence known
in September with the announcement of its participation in a $7 million
financing for Rypple. Since opening shop
in
We also came across another Wellington Financial
transaction with $5 million in venture debt going to Markham-based Real
Matters. This transaction is the eighth
transaction for
Monthly Round-up for August/September
Posted in Mike's Commentary
Q1 Capital’s newsletter and my commentary are a little
later than usual this month as we’ve been quite busy with a number of mandates
on both the sell and buy-side. Plus,
with Labor Day falling on September 6 this year, it was hard not to resist the
temptation of getting in some last minute golf with clients at Coppinwood.
M&A Activity Trends Higher Despite Growing Economic Concerns
Posted in Mike's Commentary
M&A sources that we follow have all reported that the
second quarter of 2010 was a strong one for technology deals in the
The shoemaker's children are often shoeless
Posted in Mike's Commentary
I guess I’m a good example of the old proverb about the shoemaker's children. While my firm has been busy selling our
client’s businesses we simply haven’t spent enough time selling ourselves. During the past month I’ve had a number of
meetings with companies and individuals who were not fully aware of the fact
that Q1 Capital is almost entirely focused on providing M&A advisory
services to private Canadian companies looking to monetize the value of their
businesses. As with many of the successful
companies that we work with, we have changed and adapted our business model to
meet the challenges and opportunities presented by the North American capital
markets. Where we were once focused
entirely on raising capital for technology companies from Canadian and
May Shows a Nice Uptick in Activity
Posted in Mike's Commentary
We saw a nice uptick during the month of May in terms if
both reported deals and dollars invested.
For the month, we found a total of 14 transactions being reported for $84.7
million with sizable investments being made in Delta Q Technologies ($17
million), Blueprint Software Systems ($14.3 million), Vantrix ($14 million),
Vivonet ($8.5 million), Energate ($7.2 million) and Sidense ($5 million).
BumpTop Me!!!!
Posted in Mike's Commentary
First came Google and then came BumpTop,
a company name that is poised to become a verb.
Can’t you just see all of the early-stage technology companies with inflated
views on valuation and the inevitable or preordained sale to Google, Microsoft
or Oracle looking you in the eye and telling you straight faced that they are
the next BumpTop? All kidding aside,
kudos to Anand Agarawala, his angel investors, Amar Varma at Extreme Venture Partners and Scott Pelton
at Growthworks, for believing in Anand’s
ability to turn his masters thesis “Enriching the Desktop with Physics, Piles
and the Pen” into reality, grow his team to 16 employees, and convert $1.65
million in investment capital into a rumored $30 million sale to Google. Hopefully we’ll see lots more Canadian
companies get “BumpTopped” in the near future!
Plenty Of Players But Still Little Money
Posted in Mike's Commentary
While reported financings in March simply confirm the continued weakness of the Canadian private investment sector, a real positive note was the large number of firms that made investments last month. These included: Covington Capital, VentureLink, Wellington Financial, MMV Financial, Morningside Technology Venture,BDC, Northwater Intellectual Property Fund, Ontario Centres of Excellence, Chrysallix Energy, Green Angel Energy Corporation, Northbridge Capital Partners, Caisse de depot et du Quebec, FIER Longueuil, Fonds Soutien Longueuil, Investissement MSCI, ACE Management, NSBI Venture Capital, MSBI Valorisation, Go Capital Fund, BankInvest New Energy Solutions (Denmark), SiC Processing (Germany), Bekaert (Belgium), Epic Ventures, Gideon Hixon, Enertech Capital, Cycad Group, Espirito Santo Ventures, Milcom Technologies, Applied Ventures, Phoenix Fire and Merrimaker. No doubt the large number of foreign investors bodes well for the sector.
Another positive note during the month was...
Can’t you feel it getting warmer?
Posted in Mike's Commentary
Good news on the M&A front with just published 2009
results showing that we ended the year with a very strong quarter. Crosbie & Co. reported that the number of
fourth quarter transactions increased by 18% year-over-year with 254
transactions totalling $32.9 million versus 216 transactions worth $19.9
million during the same period in 2008. Importantly, Q4 represented the third
straight quarter of increasing activity.
For the year, early numbers indicate that a total of 837 transactions
worth $1.348 trillion were completed, representing a 27% decrease from the 2008
transaction volume of 1,152 deals but an increase of 23% over 2008 transaction
value of $1.097 trillion.
"Flat" appears to be the new "Up"
Posted in Mike's Commentary
We ended 2009 with another disappointing month and
January’s results were basically flat year-over-year, which is not a good thing
when we reflect on the state of the market 12 months ago. Nonetheless, we do see positive signs in the
fact that so many different VC investors took part in transactions. In December, we saw investments from BDC,
Propulsion Ventures, The Solidarity Fund QFL, Yaletown Venture Partners and the
New Brunswick Innovation Foundation while January saw announcements from
Wellington Financial, JLA Ventures, Tech Capital Partners, Ontario Emerging
Technologies Fund, BDC, Growthworks (Atlantic Venture Fund and Canadian Fund),
Ventures West, Pangaea Ventures, First Leaside and
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