Excellent article by Andrew Findlay in the July issue of BC Business Magazine and Techvibes contributor Angel Basil Peters is front and center. Nothing Ventured Nothing Gained covers the BC VC gamut – everything from the B.C. Discovery Fund ceasing redemptions to Paul Lee’s $100 Million Vanedge Capital I Fund NOT being a regional fund.
Here are a couple quotes but be sure to read the whole article to put them in context.
It’s been a dreadful few years for the venture capital field, a situation made markedly worse by the recession and a growing aversion to risk. Can things be turned around? Or is a new funding model in order for B.C.’s startups?
In December 2009, the B.C. Discovery Fund ceased redemptions after paying out $5.2 million to investors, and in January managers of the $23-million Pender Growth Fund informed shareholders that they could only meet 55 per cent of share-redemption requests for the time being, blaming “reduced opportunities for near-term liquidity in the fund’s portfolio.” In early May, the B.C. Advantage Fund temporarily suspended redemptions of its two VC funds, also citing a lack of cash.
Basil Peters believes that if the VC sector is to survive, it must emerge from the current meltdown leaner and more tightly focused, ruled by smaller funds whose managers’ remuneration is more closely tied to the success of their investments. Peters heads Fundamental Technologies II, which he calls an early-stage angel fund specializing in high-tech.
Still, successful fund managers go where the good investment prospects are, and that doesn’t necessarily always lead to B.C. Paul Lee’s new firm, for instance – with a focus on social media and new media gaming apps for devices such as iPhone, iPad and Android – announced in May that its first fund, Vanedge Capital I LP, closed at $100 million, with expected exit time horizons in the three- to five-year range. Lee says Vanedge is not a regionally focused fund, which is another way of saying it’s not married to investing in B.C.; hence its first play last September was for a stake in Toronto online advertising specialist NeoEdge.