CVCA: There is a Venture Capital crisis in Canada.

“The data conclusively demonstrates that there is a venture capital crisis in Canada,” said Gregory Smith, President of the CVCA. “we have a structural problem and this means Canada’s ability to drive innovation will weaken and we will see the overall economy suffer.”

Earlier this week Canada’s Venture Capital and Private Equity Association published second quarter results which included the lowest level of investment in 14 years.

Venture Capital activity in the second quarter came in at $179 Million, representing a 42% decline from the $309 Million invested in Q2 2008 and 34% lower than the $272 Million invested in the first quarter of this year.

The average deal size has fallen to $1.9 Million from the $2.9 Million average reported in both the first quarter of 2009 and the second quarter of 2008.

The industry statistical reports were prepared with research partner Thomson Reuters and are available here: Venture Capital report and Private Equity report.