Is Garage Capital Canada’s ‘Best’ VC at Picking Winners?

I've crunched the numbers and the results are in and with them, I'm going to anoint Garage Capital as the best VC in Canada at picking winners. I wanted to go out on a limb and try to pick Canada’s best VC. The problem is though, there are lots of ways to define ‘best’. Does best mean, picking winners, growing companies, earning the highest return? Since it is very difficult to measure return rates and I can’t calculate how firms contribute to growing their investees, I’ve decided to go with ‘best’ meaning picking winners. Now of course I have another problem and that is establishing what a ‘winner’ is. So many questions for so early in the morning.

For the sake of this blog, I’m going to define ‘winner’ as a company that has a high Scaleup Ranking, that being the methodology used to rank companies on the Narwhal List. To compile the list, I looked at all VC firms that had invested in more than 10 of Canada’s Scaleups. (See the Narwhal List for more on methodology.) I computed the average scaleup rankings of the firms in their portfolio and through the magic of Excel, I came up with the definitive list of Canada’s top 10 VCs.

I scratched my head when I first looked at the list, seeing firms of so many different types but I quickly winnowed the list down. I first took out the US VCs, firms like Bessemer Venture Partners, Insight Partners, Techstars, and White Star Capital because we are looking for Canadian VCs. I then decided to take off later stage VCs. If you’re investing in later stages, it is pretty easy to pick winners as you’ve got a solid set of results to evaluate. What is hard is picking winners at an early stage. For this reason, I removed OMERS Ventures and Inovia Capital from consideration (although kudos to them and Inovia in particular for such a good set of investees.) This left a close race between Garage Capital, Real Ventures, and Creative Destruction Lab.

Garage tops the list in average Scaleup Ranking and they have 14 of their 85 investments or 16.5% scaling up. Real has 15 of their 289 investments or 5% scaling up. CDL has 62 of their 766 investments or 8% scaling up. So, based on two factors, scaleup ranking and percentage scaling up, Garage is the clear winner. Congrats to Michael Litt, Devon Galloway, and Mike McCauley for winning this year’s sweepstakes.