Basil Peters is a Techvibes Guest Contributor.
Contrary to general opinion, BC and Alberta entrepreneurs and investors produce excellent returns from our tech companies. One of ways we do this is by being better than any other province, or state, at early exits. Yes, we sell our companies earlier than anyone else.
And that’s a good thing – a very good thing. It generates higher returns. This is not an opinion. It was proven by an excellent study lead by Thomas Hellman at the UBC Sauder School of Business. The study is available here. This study concluded: “British Columbia and Alberta are the two most profitable jurisdictions across all of Canada and the US when evaluated against R&D spending.” This is exactly what happened in my early-stage venture capital fund, the BC Tech Fund. In that portfolio, I invested in nine companies. Three years later, three companies had achieved a liquidity event – one went public and two were acquired. Those early exits did wonders for the returns on that fund.
From the information available, while I managed the BC Tech Fund, it the highest performing retail tech venture capital fund of its vintage in Canada. (The top performer of all types is also a BC Advantage Fund – Jim Heppell’s early stage life sciences fund.) There are lots of great examples of hugely successful early exits in BC. Club Penguin, OctigaBay, Brightside and Flickr are profiled on this page in AngelBlog on early exits in BC. If you know of another early exit winner that should be included on that page, I’d really appreciate an email so I can update the list.