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Diverse Venture Capital Resources for SMEs in Canada

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Venture capital resources for SMEs in Canada

Small and medium-sized businesses in Canada are often founded on venture capital investment, a type of funding that trades partial ownership in one’s company for an amount of money from an investing partner, usually a private firm, or corporate organization from a commercial partner.

Canadian venture capital investment reached a record $14.2 billion in 2021, following a number of years of equally ground-breaking amounts. While it’s since slowed to pre-pandemic levels in the second quarter of 2022, different provinces, industries, and sectors continue to report high venture capital economic activity. 

There are many different programs connecting entrepreneurs to venture capital across Canada. Knowing the different streams available to you will help you match your business's unique needs with diverse investment options from private venture capital firms to government-backed venture capital initiatives.

Banks

A great place to look for all your initial startup financial needs, your personal bank can be a source of venture funding, and can connect you with other financing options based on your company’s unique assets. 

Though traditional wisdom counsels that startups have lower chances of securing funding from banks because of the higher-risk nature of their firms - most startups lack hard assets against which to measure their value or provide a lower-risk investment - that’s no longer necessarily true. 

As the tech industry booms, banks are taking a second look at how they invest in startups. Some interesting VC bank-backed options include Desjardins Capital, which promises to “provide you with the tools to nurture your start-up’s growth and improve its odds of success”. There’s also RBCx which helps entrepreneurs with “big ambitions” reach X. National Bank has NAventures, a capital investment stream for early and mid-stage companies working to innovate the financial industry.

Federal, Provincial, Regional, and Municipal programs

Venture capital doesn’t only come from private investment firms or banks. There are many government-sponsored venture capital programs that vary province to province, across cities and regions, and overarchingly across Canada.

In some cases, regional restrictions may apply, but typically government-backed venture capital is available to all entrepreneurs who meet the business criteria. Find a subsidized federal venture capital program near you to take advantage of your tax dollars at work.

Federal Venture Capital for Startups

Canadian Venture Capital & Private Equity Association - CVCA focuses on three main things: research and data analysis, policy advocacy, and member resources. With more than 270 member firms, and 1,800 individuals, it can connect entrepreneurs from all sectors with funding and more. 

McMillian - McMillian offers funds-for-funds financing. For every $3 you raise from a private venture capital, you’re eligible for $1 of funding backed by the federal government. 

Venture Capital Catalyst Initiative - Canada launched this venture in 2021 specifically to help SMEs across Canada recover from the economic effects of Covid-19.

WES Inclusive Women Venture Capital Initiative - Canada is committed to helping women-led companies flourish with a 3-year non-repayable contribution program totaling $15 million.

BDC Capital

The Business Development Bank of Canada (BDC) is a large bank owned by the federal government. The funds dispersed by the BDC are required by law to help create and develop Canadian business, with a focus on SMEs.

Often the first stop for any and all startups, the organization offers multiple capital funding streams, in addition to loans and advisory services. All startups in Canada, from brand new micro-businesses to experienced entrepreneurs, should see what the BDC has to offer, as their range of programming grows yearly. 

Venture capital offerings from the BDC include:

Deep Tech Venture Fund

  • Focused on transformative technologies in deep tech verticals: quantum information sciences, photonics, electronics, foundational artificial intelligence

  • Early-stage equity investments

Women in Technology Venture

  • Seed to Series B investment

  • Invest in women-led Canadian technology companies across a wide range of sectors

  • Access to resources, a broad international network and venture partners to help scale

Industrial Innovation Venture Fund

  • Series A funding and beyond

  • Focus is on Canadian companies with demonstrated market validation

  • Supporting companies in sectors of Canadian economic advantage such as manufacturing 4.0, agri-tech and food-tech, and extractive industries (oil and gas).

Industrial, Clean, and Energy Technology (ICE) Venture Fund

  • Early-stage investment and reserve capital for follow-on rounds

  • Broad networks and alliances

Provincial Venture Capital Resources for Canadian Startups

Looking within your own region, province, or municipality will often quickly direct you to investors likely more familiar with your company’s particular innovative ecosystem than those 1,000 miles away, for instance. 

Check out this handy list of diverse venture capital resources for startups organized by province.

Province

Company

Features

Alberta

The 51

 

Alberta Enterprise

- Mission: to foster a thriving venture capital industry in Alberta
- Multiple large scale funding streams.

AVAC Group

- For agritech entrepreneurs
- Access to venture funding and mentorship

The A100

- Nonprofit hub for venture capital resources in Alberta
- Links to funding streams across a variety of industries

Alberta Innovates

- For "high-growth, high-potential SMEs" in tech and knowledge sectors
- Extensive programming

British Columbia

British Columbia
Provincial Government

- Venture Capital Tax Credit
- Provides program guidelines

 

 

Manitoba

Manitoba
Provincial Government

- Small Business Venture Capital Tax Credit

Manitoba Investment Fund

- Government mandated vc funding for SMEs
- Managed by the Manitoba Technology Accelerator

The North Forge
Venture Capital Clinic

- For entrepreneurs in their Founders Program
- VC funding plus no-cost incubator services

New Brunswick

NBIF Venture Capital Fund

- Equity investment for scaling
- $200,000 to $500,000 per round
- For residents of New Brunswick

Newfoundland and Labrador

Venture Capital Tax Credit

- Provincial government subsidy

- Tax credit for up to 30% of qualifying raised capital

Venture Newfoundland
and Labrador II

For local start-ups early-stage companies

Killick Capital

- Private equity firm for SMEs in Atlantic Canada
- Aerospace and high potential tech

Nova Scotia

Sandpiper Ventures

- $5 million endowment from the government of Nova Scotia, and more from other provinces
- For women-led startups
- Serves all of Atlantic Canada

Atlantic Women's
Private Venture Fund

- Hub for female-led SMEs in Atlantic Canada
- Includes links to funding opportunities

Nunavut

Atuqtuarvik Corporation

- Corporate investment company
- For Inuit businesses
- Risk capital, assistance sourcing other funds

Nunavut Development Corporation

- Equity investments
- Nunavut economic sectors esp. fishery, tourism, and cultural industry

Nunavut Trust

- Mandated trust for Nunavut Agreement Settlement Payments
- Canadian public equity investment

Ontario

Ontario Venture
Capital Fund

- Joint public and private investments
- For cleantech and life sciences

PEI

Island Capital Partners

- Private firm
- Early stage venture capital for high potential PEI startups

Quebec

Anges Quebec II

- Supports seed and start-up funding for Quebec entrepreneurs
- for cleantech, medtech, industrial, AI and software sectors

CDBQ

- For B2B/SaaS companies across industries
- Focus on internationalization

Triptyq Capital

- Seed stage funding for tech SMEs
- Focus on projects that improve Quebec's creator economy

Yukon

Panache Ventures

- Pre-seed, seed stage & first round investments
- Yukon-based, Canada-wide offices

 

Private Venture Capital Firms Across Canada

Here are a few of the top resources for raising venture capital across the country.

Company

Sector

Funding Stage

brightspark

Tech

Pre-Series A

chrysalix  

Early and late stage

cyclecapital

Cleantech

Multiple funding streams for different stages

blueimpact

Water consumption solutions, tech & industrial

Early and
expansion stages

extremeventurepartners

Tech

Pre-seed to seed-stage companies

goldenventures

Multiple sectors

Seed-stage, investment targets from CAD $500 to $2,000,000

iGan

Health tech

Early Stage,

lumiraventures

Biotech, medtecy, digihealth and consumer healthcare

Early, clinical and revenue stage companies


panacheventurecapital

High-potential tech, diversity focus

Series A & beyond

PangeaVentures

Hardtech w/ advanced material solutions

 

realventures

Community driven tech

Early

relayventures

Early-stage companies, Fintech, urbandtech, proptech, sportstech verticals

Hands on approach

renewal

Environmental innovation & sustainable cosumer products, mission-led

Early growth stage

scaleupventures

Provides capital and connections for high growth tech companies

Early-stage
(seed & series A)

vanedgecapital

Hardtech, analytics, computational biology

 

Yaletown

Software, data & device technologies

 

capitalangelnetwork

Ottawa tech startups

 

greenskycapital

IT, Cleantech, medtech

Early stage through growth

angesquebec

Provide value-added investors for seed and early stage startups

 

gtan

Early-stage companies, relies on feeder network to recommend companies

 

interactionventures

Focus on commerce, looking for exceptional team

Seed funding

 

Takeaway

Canadian SMEs looking for venture capital investments hit the motherlode in the last couple of years. In 2021, venture capital entities invested $14.2 billion in small- and medium-size businesses. Despite slowing to pre-pandemic levels this year, provinces, industries, and sectors report high venture capital economic activity. So, where’s your money?

Banks, private venture capital firms, and government-backed initiatives to fund a start-up, a scaleup, or an entire business overhaul are within reach now more than ever before.

Knowing which streams and programs are available to match your firm’s unique needs is essential to connecting to the diversity of investment options. Bringing entrepreneurs and venture capital investors together is a little like dating. Getting to know one another before committing can assure a relationship that’s long-lasting and fertile. 

Summary

Venture capital is one of the most important funding opportunities for Canadian entrepreneurs. We’ve put together a comprehensive guide to the major sources of venture capital in Canada, from banks and government-backed initiatives to some of the best private venture capital firms in the country.

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