In 2001, when my family and I moved from Seattle to back to Canada, we had a choice between Ottawa, Waterloo, and Toronto. At the time, Ottawa was booming. Venture capital was pouring into the city, and it proudly proclaimed itself Canada’s Tech Capital, and Silicon Valley North. So we moved to Ottawa.
A decade later, the picture is much different, as the Ottawa Citizen has reported in Nothing Ventured this morning. The graph included in the Citizen’s article paints an ugly portrait. In 2010, Ottawa’s venture funded start-ups are starved for funding, with just $10.8 million raised in the first quarter of this year, compared to $1.38 billion in 2000. Even worse, it appears that year 2000 hype and rhetoric around Ottawa as Tech Capital of Canada was simply …. hype. Today’s anemic funding environment appears to be the same as historical pre-bubble levels.
Many will rightly point out that funding is available from other geographies, and that is true. However, start-up companies need more than funding to prosper. They need strong boards, good advisors, mentors, access to a talent pool, and world class educational institutions to support them. Ask a Silicon Valley VC whether or not they would invest in Ottawa, and the answer you will get is a qualified no. It will be something like “It would have to be an exceptional team, with an exceptional idea, and a massive market opportunity, because we have plenty of deal flow right here in our backyard.”
Here at home, I’ve travelled to Toronto, Kitchener-Waterloo, and London to meet investors. Despite their proximity, it’s still a couple of days on the road to meet. Whether you’re in Toronto or Silicon Valley, the economics of sitting on an Ottawa board of directors don’t make sense. It takes two days of travel to have a meeting, whereas you could have 10 board meetings in the same period of time with companies that are local.
If Ottawa is to be competitive, then Ottawa needs a local venture industry. We have plenty of local entrepreneurs. Now we need the team at OCRI and our municipal government to focus on economic development for the tech sector — bringing capital to the region, creating support networks for companies that are here, and fostering a competitive environment for Ottawa companies to succeed.
Otherwise, we really will be just that sleepy little ex-lumber-town on the Ontario-Quebec border that Queen Victoria named as the Capital of Canada.