Canadians starting a small business might not easily find startup funds from venture capitalists
Even if periods of economic downturn may be good times for opportunistic entrepreneurs to start companies, finding startup funds in the midst of a recession might be tricky. The Financial Post reports that statistics recently released by Canada's Venture Capital & Private Equity Association and Thomson Reuters reveals that in 2009 the venture capital market fell to its lowest level in 13 years.
Over the course of the year, deal activity fell by 27 percent. In 2008, more than $1.4 billion was invested in venture capitalist deals, but 2009 saw only $1 billion in deals. The number of venture capitalist-backed entrepreneurial businesses also fell from 388 to 331 according to the report.
Gregory Smith, president of the association, told the Financial Post, "the availability of [venture capitalist] dollars has been eroding for years. We are failing to capitalize on the potential of our entrepreneurs and small-growth companies, which have traditionally been vital drivers of jobs and prosperity for Canadians."
In order to get the most out of potential startup funders, Venture Hacks reminds entrepreneurs of the importance of a strong business plan. An effective business plan should be interesting and convince investors that the company can impact a given industry.
