David Crow of OMERS Ventures and Startup North typically doesn’t shy away from offering his honest opinion and a recent tweet was a good example of that.
On Monday Mark Evans, a popular tech blogger and mentor at JOLT accelerator, hastily wrote about the topic offering some relatively predictable opinion. He agreed with Crow, saying “startups are risky propositions that are just one of many options for investors,” and “most startups will fail due to a variety of reasons.” Then he compared the complaints for a lack of capital here to the U.S’s more aggressive market.
“Truth be told,” wrote Evans, “Silicon Valley is another planet with a different set of rules and a complex cabal that marches to the beat of its own drum.”
To his credit, Crow appeared to clear up his stance for any hurt feelings by commenting on Evans’ article.
“A healthy ecosystem is one where you are building successful companies. These companies make money. They have growing customer bases and revenues. Because if you aren't building successful companies you can't do the other things,” wrote Crow. “It's not about giving money to starving entrepreneurs because we have an entrepreneur shortage. We have a successful company shortage. We have an abundance of entrepreneurs.”
This morning Evans followed up on the matter by publishing the thoughts of seven well-known VC’s who agreed to weigh in. Some of the highlights are below:
“The perception there is a lack of VC in Canada is driven by two things: i) An insufficient understanding of how VC works. To deliver the returns our LPs expect, we need to filter hard and select the best opportunities; and ii) because of this harsh filter, most of the companies that approach VCs don’t fit.” –Mark MacLeod, Real Ventures.
“If a startup team is struggling to raise money in today’s environment in Canada over an extended period of time, they need to take an honest look at themselves, their product, the market they are targeting or their approach to raising capital…Globally, a very small percentage of businesses receive VC because VCs have a very specific criteria that fits only a small subsection of the businesses out there. Canada shouldn’t be any different. In order to deliver the returns that investors in VC funds demand, only the companies that have the potential to reach a billion dollar enterprise value relatively quickly should be VC-backed.” –Roger Chabra, Rho Canada
“Could we do with more capital? Yes, of course. Just compare the money invested into Canadian tech companies in 2002 versus 2012, and you’ll quickly notice that last year there was but 1/5th of the capital put at work. But, when there is a lot of cash available, it’s not necessarily generating better results (meaning we aren’t seeing more real big valuable companies being built) than when there is not enough! Interesting no?” –Chris Arsenault, iNovia Capital
“I am empathetic to the entrepreneur David was speaking to/referencing, simply because of where I sit in the world. IMHO, more does need to happen at the large seed / series A that our graduates look for, and beyond. I hope investors both here and abroad are more driven by YOLO than FOMO…. Sorry to sound preachy, but my general comment is that we ARE thriving as a startup community and I hope more of the community and media portray the glass as half full rather than half empty.” –Andy Yang, Extreme Ventures