Federal Budget to support LSIF program?

2 responses

  1. Ian Graham says:

    Hi Mark,

    In your opinion how important are LSIF to the start-up community in Ontario?

    Did you notice a change in activity after the current Ontario Government cancelled the funds in 2005?


    Ian Graham

  2. Mark McQueen says:

    Ian. Thanks for the question. In our experience there was a dramatic shift in the number of doors that an entrepreneur (or a syndicating VC) could knock on as a result of the McGuinty decision on LSIFs. Think of it this way: about half of the firms that you would normally call regarding early stage investing lost much of their firepower overnight. Some of the larger ones still had new funds to invest, of course, but not to the same extent as they’d once had.

    As a result, with less VC capital to supply into a growing economy, only one of two things could happen: valuations went down and/or fewer firms got funded.

    And the torrent of new LP money that the gov’t was told would flow from the pension funds into the traditional Venture GP structures never happened. To the contrary, institutions such as OMERS for example stopped their Canadian venture GP investing altogether after key folks left and OMERS disbanded the rest of their investing team.

    So, a double whammy in fact.


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