Ontario politicians asked to address deteriorating VC climate part 2
Ontario continues to experience declining VC funding, and the recent stats suggest the beating isn’t over quite yet.
As you may recall, a few venture funds tried (“Ontario politicians asked to address deteriorating VC climate“, October 1-07) to make the deteriorating Ontario VC climate a bit of an issue in the recent provincial election campaign. While there was some media interest (“BNN interview on VC funding woes“, October 4-07), we couldn’t get any of the political parties to even acknowledge that a dramatic drop in new investment (and the associated jobs) was worthy of discussion – let alone action.
The OBJ story today from Ottawa paints a dark picture:
“Venture capital investment in Ottawa-area companies fell again in the third quarter after a rebound in the previous period, according to the latest release by the Ottawa Centre for Research and Innovation.
The report said that total disclosed funding for the region fell by 72.8 per cent year-over-year to US$23.2 million, with a total of three disclosed deals for the quarter. In the third quarter of 2006, five Ottawa companies received a total of $85.3 million in venture capital financing.
The numbers were also significantly lower than in the second quarter of 2007, when five companies received venture capital totalling $68.9 million.”
Ottawa is just one important centre, but the stats from Waterloo, for example, are sadly no better.
Now that election is over, and the Ontario public service is now able to re-engage with the venture capital and university commercialization community, perhaps some strategies can be put to work to immediately address the dramatic drop in the funding of early stage Ontario-based technology and life sciences firms.
The Ontario Liberal campaign platform included a $20 million “fund” for rural and eastern Ontario SMEs, but that just isn’t going to cut it. Our provincial government needs to consider what B.C. and Quebec have been doing of late, and ask themselves why investment in those two provinces has rebounded, while Ontario has waned.
If you don’t recognize that the patient is sick, you can’t find a cure. The provincial gov’t needs to stop hoping that the next quarters’ VC stats will prove them right, after 16 or so consecutive quarters of declining trends.