VEF panel gives BC investors and companies chance to grill American VCs

Geoff Entress of Madrona Ventures Group (who invested in Victoria-based Mixpo in 2006), Alex Gove of Walden Venture Capital and Jenny Yang of BDC Venture Capital all took part in a panel presentation at the Vancouver Enterprise Forum on Tuesday aimed at letting BC investors and companies pick their brains on how American venture capital firms operate, how BC companies can approach them and what they look for when investing in BC companies. The panel stressed that they generally don’t invest unless they have a local partner, and local tech luminary Boris Mann asked the panel if they typically take the lead on deals or wait for their partner to bring them into a local environment, and the consensus was that if a firm is interested in working with American VCs the best thing to do is to come down to them in the US, just as Seattle companies go to the Bay area for venture capital. Though putting US money in a Canadian company can mean regulatory hurdles, the two US VCs said it wasn’t a huge obstacle. Yang did point out that at some times it is easier to set up an American company and create a Canadian subsidiary, solely to avoid onerous regulations. One audience member said some California investors have mentioned that Vancouver has a reputation for not having executive-level experience, and the panel said that one of their roles is, if necessary, to locate additional talent they already know about and can bring to a new investment. They also pointed out that it’s critical to have the right management team in place before funding takes place. Finally, the panel’s view was split on Web 2.0 companies and acknowledged that while such companies don’t need much investment and can engage visitors, it’s important that each firm has a way to drive revenue other than the “if you build it, they will come” model.