B.C.’s venture capital market could do with a positive culture shock to create a constant flow of capital for fledgling businesses, according to industry experts.
At this year’s BC Securities Commission annual conference, Darrin Hopkins, vice-president of public venture capital at Macquarie Private Wealth noted that Calgary’s vibrant oil and gas sector has managed to create a continual cycle of capital investment in the industry. That has helped boost the development and progress of the sector over the last several decades.
The same cycle of capital reinvestment has not persisted in Vancouver for several key sectors like industrials and biotech, which is one of the reasons why some fundraising challenges exist in B.C.’s venture capital markets.
A similar cycle of capital reinvestment could bode well for companies looking for venture capital funds, he said. But a track record of success is likely needed because “I believe most people invest with their earned capital as opposed to their earned income.”
Hans Knapp, partner at Yaletown Venture Partners, noted it has become more difficult to raise venture capital funds because many large institutional investors departed the asset class following the decline in the capital markets that shifted the asset balances of their portfolios.