Three Key Takeaways from CVCA’s Invest Canada ‘18 Conference

This week’s CVCA’s Invest Canada ’18 conference in Calgary provided a great opportunity to celebrate the health of the Canadian economy and capital investment markets with the country’s investment community.  

Here are my three takeaways from the event:

Technology is top of mind

This year’s conference was particularly inspiring for those of us coming from the technology community.  I was struck by the robustness of the Canadian capital landscape and the community’s technology interest.  Investors from venture capital, private equity, and corporate venture capital alike consistently and articulately wove technology throughout almost every conversation I had about their investment approaches and how Canadian industries will continue to grow, scale, and compete.

There is a rising interest and understanding of the role that technology plays in the investment activities of the future – both as a standalone sector and as a critical aspect of successful businesses across markets.  

Canadian tech entrepreneurs have options

Many years ago, a perennial problem in Canada’s tech sector was a lack of capital. That’s clearly changing.  Consider these numbers:

• Venture capital deals increased 11% in 2017 to total $3.5 billion (compared to $3.2 billion in 2016). Investment continues to trend upward with Q1 2018 seeing 6% more capital invested than Q1 the year prior, according to CVCA’s 2017 Report.
• In private equity deals last year, information and communications technology companies received the second largest share of activity, representing a 263% increase in deal activity since 2013 according to CVCA’s 2017 Report.
• Corporate investors participated in over a quarter of the deals to Canadian companies last year, according to PwC’s MoneyTree Canada Q1 2018 report.  Compare this with 16% in 2016.

Our investment community is answering the call to fund the Canadian entrepreneur.

For corporate venture capital, success is more than a return

I had the opportunity to moderate a panel on corporate venture capital featuring ATCO Group’s Norm Bogner, TELUS Ventures’ Rich Osborn, and BP Ventures’ Meghan Sharp, each of whom shared insights about their investment approaches.

For these investors, investment decisions are almost always strategic. Investments should not only provide a return, but align with their corporate innovation strategies and allow their corporations to tap into the higher metabolic rate within agile tech companies. Digging a little deeper, these investors revealed that they seek out:

• Alignment with a business unit:  These corporations invest in companies with which they want to do business. Typically, either a business unit is seeking a commercial arrangement with a tech company that also provides a chance for investment, or the corporate venture team finds an interesting target, and brings it to a business unit to explore its commercial value. The investment simultaneously lets them secure an element of their strategy, help the tech company liftoff, and share in its success.
• Mutually beneficial relationships:  The relationship between corporation and investee has bidirectional value. TELUS, for instance, makes its teams and leaders available to its portfolio companies for mentoring and coaching – but the teams gain as well, returning to the organization invigorated from the experience within the tech company.

For corporate venture capital, success is a confluence of return, commerce, and knowledge-sharing.

Thanks to the CVCA

With its support of the venture capital and private equity sectors, the CVCA plays a key role in the continuing maturation of our investing community and the access to capital for Canadian entrepreneurs.  PwC is proud to have been  a sponsor of the Invest Canada conference.

Our trajectory is exciting. The Canadian investment community clearly gets tech, and that’s promising for investors, promising for entrepreneurs, and promising for Canada.

Congratulations to CEO, Mike Woollatt and the CVCA team, as well as outgoing Chair Whitney Rockley, and incoming Chair Mark Usher on a great event.