Young Tech Companies Monopolize Venture Capital in Canada.

The phenomenal development of young technology companies is monopolizing virtually all the energies and resources of the Canadian venture capital industry, which invested $2.2 billion in these companies in 1999. This accounts for 80% of the total venture capital investments in all industries in Canada.

According to the results of the most recent Business Development Bank of Canada (BDC) survey on the economic impact of venture capital investments in Canada, the venture capital industry is doubling its investments in the development of technology businesses every year. In 1993, the first year for which data was compiled, the venture capital industry invested $184 million in technology companies; in 1999, the figure rose to $2.2 billion. And investments in technology in the fist six months of 2000 were already at $1.8 billion.

"At this rate, we think it will soon be necessary to invite other large portfolios, especially those of pension funds, to develop partnerships with our industry to increase the pool of venture capital accessible to technology companies," says Michel Re, BDC senior vice-president, Investments. According to Re, the study establishes a direct correlation between venture capital investments and the success of young technology companies. "Knowing that these companies make a greater contribution to job creation and export growth than other companies, it is easy to conclude that our support for their development is vital."