I dropped into the Ottawa Network at the Code Factory last night to hear Shirley Speakman from Ontario’s Ministry of Research and Innovation, Matt Williams from IPeak, and Paul Dawalibi of Montreal’s St. Lawrence Capital (formerly Garage Canada) speak on Seed Funding. It was well worth attending, although I doubt that Paul’s presentation was as well received as he would have liked. Abrasive, confrontational and some would say hostile, his message was pretty simple — VC’s are in it for the money.
I asked Paul whether the current US downturn would affect St. Lawrence’s ability to call up cash from their committed LP’s. He brushed the question aside with an explanation that the LP’s are committed, and the real impact is going to be on exits. This morning’s Internet news, however, brings these three stories:
- Sequoia Rings the Alarm Bell: Silicon Valley is in Trouble (via GigaOm).
- Angel Investor Ron Conway Emails His Portfolio Companies Over Financial Meltdown (via TechCrunch).
- What Will the Crisis Mean for Venture Capital? (BusinessWeek)
The front page of the Ottawa Citizen also carried the story of Ottawa startup Bill Me Later, acquired for $945M yesterday after leaving Canada for the United States, and US funding. The message? Canadian financing rules and financial markets make it nearly impossible for Canadian innovation to be anything but R&D for US interests.
Clearly Paul Dawalibi and St. Lawrence are swimming upstream with a great deal of optimism in a tough market. Perhaps his hubris is simply due to knowing that St. Lawrence is one of the last funds still standing in a difficult Canadian market.
I’d still like a more considered answer to my question. How will the downturn in the US affect the cash reserves of St. Lawrence’s LPs? How will the downturn impact follow on financing rounds? Should entrepreneurs be doing anything differently as a result?
Paul’s writes a blog under the nom de guerre of The VC Whisperer. Check it out. There are some pearls of wisdom there, but none relating to the current situation as it was last updated July 1.