Rick Segal, a principal at J.L. Albright Venture Partners in Toronto, has some advice for U.S. venture capitalists looking to invest in Canada.
“I would take a look at the technology first,” says Segal, a onetime Microsoft Corp. executive who most recently served as president and CEO of Toronto-based Microforum. “I would take the time to look at what the country is doing from that perspective.”
That’s exactly what Segal did when he took on his investor role at J.L. Albright in 2000 after a career in technology. He attended such gatherings as the annual Toronto Venture Fair, where he says he met “virtually every member” of the Canadian Venture Capital Association.
He would also attend regional VC fairs in such locales as British Columbia and Calgary to further deepen relationships.
Of course, Segal had a slight advantage over his U.S. counterparts; he’s a Canadian citizen. But he insists anyone can grasp what’s going on in his country just by attending a few Canadian VC functions.
“You can meet everyone in one shot, which is something that can’t be said for going to the VC conferences in the United States,” Segal says.
Segal says that it’s also important for U.S. VCs to hookup with a local partner. Such is what Draper Fisher Jurvetson did more than two years ago when the Menlo Park, Calif.-based venture firm opened a Toronto-based Affiliate in partnership with Primaxis Technology Ventures Inc. The fund is under the direction of Ilse Treurnicht, president and CEO of Primaxis.
“You cannot come into a country like Canada with the expectation that it is the same as investing in the United States. It isn’t,” Segal says.
Similar to Segal, Mark Robinson, director of Vimac Ventures in Boston, says it’s important to partner with a Canadian company when U.S. firms invest north of the border.
Vimac is one of the more active U.S. firms in Canada, having invested $45 million in 13 companies since 1997, according to Robinson. The Canadian investments represent about 40% his firm’s portfolio. Vimac recently led a $10 million series B round in Ottawa-based startup Nakina Systems Inc., a telecom software company. Vimac co-invested with VenGrowth Capital Funds, a Toronto-based investor.
“You got to have local feet on the street in Canada,” Robinson says.