Canadian Venture Capital investing fails to match US growth in Q1

The Canada’s Venture Capital & Private Equity Association (CVCA) and research partner Thomson Reuters released their Canadian venture capital market investment activity numbers for Q1 today.

The data reveals that venture capital invested across Canada totaled $315 million between January and March, up marginally from $311 million invested in Q1 2010. While these were positive gains for Canada they failed to match growth in the United States. Disbursement levels totaled US$6.1 billion in the US market in the first quarter of 2011, or 19% more than the US$5.2 billion invested at the same time last year.

Canadian venture capital investment during Q1 went to 111 companies with an average investment of $2.8 million. The CVCA reported that this average investment size is a mere 36% of the dollars going to VC-backed companies in the United States.

With the annual CVCA Conference taking place next week in Vancouver, the message in today’s report is clear – High-growth tech firms in Canada continue to be starved of the value-added risk investment they need to realize their potential. In the fiercely competitive world of tech startups, “time-to-market” is the imperative and without adequate deal capitalization, Canada is in danger of falling behind.