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Canadian Venture Fortune Telling

One piece of news shows a bright future, the other, however, looks cloudy. Let’s discuss.

What is the news?

The last week saw some major news for the Canadian funding scene. Golden Ventures announced that it had closed its fifth fund with $103m USD raised while Techstars Toronto's future was left in doubt.

What is so great about this new fund?

Golden is a sector-agnostic firm that will invest across Canada and expects to make 30 core investments out of this new fund.

Golden was able to raise quickly due its track record with returning limited partners including HarbourVest Partners, Kensington Capital Partners, Northleaf Capital Partners, RBC, Foundry, and BDC Capital among others. 

This fund is the same size as the previous fund as the team feels that this is the optimal size for their strategy. 

What about the future of Techstars Toronto?

Last week Techstars announced Techstars 2.0 which is re-imagining the Techstars offering. They will be moving their HQ from Colorado to NY and are shutting down many of their accelerators globally to focus on 30 geographic locations with the right density of venture activity.

They have not announced whether Toronto will be one of the locations to remain open. Techstars Toronto did announce that Sunil Sharma, its managing director, is transitioning out and they are currently not accepting applications for the next batch.

What does this all mean for the Canadian ecosystem?

Different signals for different stages of the ecosystem. Seed-stage companies should be rejoicing that Golden closed their next fund so rapidly and will be able to continuously fund early-stage start-ups across the country. As the fund has scaled up they have scaled up their team and support for their portfolio companies. This is a strong signal and a win for the ecosystem.

In the inception stage, Toronto-based founders may not be as excited. If Techstars Toronto does close up shop this will continue a trend of foreign-based early-stage incubators setting up in Toronto and eventually leaving. This means less capital at the earliest stages and fewer local mentors.

Did we get it right?

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