A winning venture?

Capital firm eyes local IT investments

By GEOFF MATTHEWS, Money Editor

A VENTURE capital company with a history of investing in Ottawa-area startups has a $158-million nest egg up for grabs and hopes to place at least some of that money with local firms. Ventures West yesterday announced i's put the final touches on Ventures West 8, which the company calls the largest Canadian VC fund raised this year.

The money will go to early stage biotechnology, communications, energy technology and IT companies across Canada.

"We have been an active investor in Ottawa for the past five to seven years," said Marc Wickham, vice-president of Ventures West, "and we'll we'll be looking for other great opportunities here."

RESTRICTIONS

Wickham said Ottawa, like the rest of North America, should see an easing of tight VC restrictions during the last quarter of this year and into 2004. "We're back to the pre-bubble metrics," he said, cautioning that money will not flow like it did between 1998 and 2000. There was an over-investment in those years, as fund managers got caught up in the enthusiasm," he said.

The entire venture capital industry contracted in the past couple of years, said Wickham, and Ottawa was "in line with that decline."

He predicted a rebound in the last three months of 2003, which should see at least $100 million in venture money flow into the city, with funding likely to be announced between now and the middle of December for several projects. "I know of a few of them," he said, "but I've been sworn to secrecy."

1ST-ROUND FOCUS

Ventures West leans toward first-round financing, Wickham said. "That has always been our sweet spot, particularly if a company has early revenues. We always focus on a strong business proposition, strong technology, an experienced management team and good market opportunities," he said, "and that's what we'll continue to do."

Investors in the Ventures West fund include British Columbia Investment Management Corp., Business Development Bank of Canada, CPP Investment Board, EdgeStone Capital Partners, OMERS and Teachers' Merchant Bank, the private equity arm of the Ontario Teachers' Pension Plan.

Since its founding in 1968, Ventures West has formed eight venture capital funds which total over $600 million and has invested in more than 125 companies.