Q-News

November 2009

October 2009 “Have We Hit Bottom?”

Posted in Mike's Commentary

October turned out to be a rather positive month with 12 companies reporting having received $102 million in investment capital with one additional company reporting a transaction for an undisclosed amount.  Importantly, the month was the best that we have seen for both amount invested and number of deals since September 2008.

 

We also saw increased activity in Canada from international funds with six US and one Spanish fund participating in transactions totaling $55.7 million, with an additional US fund participating in a transaction for an undisclosed amount. 

 

Investment capital went into a number of companies that appear to be gathering momentum and longevity, namely Fresco Microchip, Varicent Software and NGRAIN Corporation while Series A money went into Peraso Technologies and Morgan Solar, which probably merits keeping an eye on these two companies.

 

Take a moment to look at our trailing 12-month chart, representing our tracking of the investment dollars and deals reported since December 2002. 

 

 

While we are the first to admit that we don’t capture all of the transactions completed, comparing our numbers to quarterly announced CVCA numbers indicates that we capture about 75% to 80% of the money and 20% to 25% of the deals.  Amazing how the Pareto principle applies in so many cases.  Certainly, while we don’t anticipate any near-term rebound in venture capital investing in Canada, we appear to be seeing a less significant and damaging decline in the sector, which unfortunately is small consolation to the hundreds of private technology companies looking for capital.  Remembering that our sample size is small and venture capital represents 6% or 7% of capital invested in technology companies, the decidedly increasingly positive sentiment that we are seeing in the market in general should bode well for a stronger market in 2010.

 

The upcoming Canadian Innovation Exchange (“CIX”) is gathering momentum with a strong list of Canadian technology companies showcasing their products and services to venture capital, private equity, corporate venture and angel investors from across North America.  

 

This year’s top 20 CIX finalists are:

 

This year’s event will be held on December 2nd at The Design Exchange in Toronto.  Check it out; this should be a very worthwhile event.

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