Canada’s VC Market Strives for Maturity –

Just a relatively short time ago, the U.S. venture capital market was reveling in a dotcom feeding frenzy. Venture capitalists, afraid of missing out on the chance to fund the next Yahoo or Amazon.com, were doling out capital to a slew of copy-cat business plans. At the same time, our neighboring Canadian VCs – with a venture market that pales in comparison to the U.S. – were shying away from the rush to invest in dotcoms, instead focusing their investments on information technology deals.

Canadian VCs’ contrarian approach, coupled with an increase in foreign investment, has helped to propel its VC market to new heights. However, despite all of its impressive gains over the years, it has yet to reach its maximum potential.

In this month’s cover story, Senior Editor Alistair Christopher talks with some of Canada’s VCs regarding the development of the market as well as some of its weak spots. Most interviewed agree that stronger institutional support and more favorable tax changes are essential for its growth to continue.

Meanwhile, back in the U.S., venture-backed companies that easily received funding in the past are discovering that times have changed. Nowadays, the magic words to receive another round of venture funding are layoffs and restructuring.

In this month’s feature story, Senior Editor Carolina Braunschweig talks with some venture-backed companies that have learned a very important lesson regarding their next funding round: Shape up or shut down.