venture capital in Québec: for what, for whom, how?

Supporting venture capital in 2023 is a daily challenge. To help you find your way around, we have organized, in collaboration with Espace CDPQ, a virtual event on venture capital in 2023, aimed at the network of players involved in supporting startups in Quebec.

the event in 4 key elements:
💼 issues and prospects for venture capital investment in Quebec and Canada, discussion between Nicolas Rubbo(Espace CDPQ), Olivier Quenneville (Réseau Capital), Kalthoum Bouacida(AQC Capital), and Sarah Pisonero(BDC)

📈 presentation of Espace CDPQ and funds by sector and area of activity, by Marie-Laurence Boivin and Naomie Bourduas-Mailhot (Espace CDPQ)

💡 tips for successful collaboration between investors and entrepreneurs, discussion between Charles-Olivier Roy (MAIN), Emmanuel Glen(AWL-E) and Antoine Bellemare(i4 Capital).

🗓 upcoming launch of a venture capital training course for support players by Front Row Ventures, in collaboration with MAIN and Espace CDPQ(so you don't miss a thing about the launch)

a nuanced picture of venture capital in 2023

as we now know, in Quebec as in Canada (and our neighbors to the south), the number of investments has been falling over the past few years, and investment rounds are much longer than they were during the pandemic years. three key quotes from the experts invited to give their views on the state of venture capital summarize the first session:

"We often tend to want to compare ourselves to 2021 and the beginning of 2022, which are exceptional periods, but which don't necessarily follow a historical trend. it's much harder to raise funds now. not just for startups, but for management firms too. you have to understand that venture capital funds, too, have to raise funds. the big capital allocators are much more cautious." - Olivier Quenneville, Réseau Capital

"We're seeing the same trends in Canada. We're also noticing that institutional investors are more cautious, revising their asset allocation strategies downwards a little and adopting more conservative strategies. - Sarah Pisonero, BDC

"We have 4-5 years to deploy the funds we have. What I see in the field is less alarmist than the trends observed. we (the funds) are always on the lookout for a good pipeline of good companies. it's our job to find good companies. it's true, however, that investors are more cautious and require even more exhaustive due diligence" - Kalthoum Bouacida, AQC Capital.

and, according to our experts, what makes a company attractive to a venture capital fund?

  • a company with the potential to create value quickly and take market share. #Velocity
  • the quality of the people behind it. Its vision, its potential. The founders' entrepreneurial experience. #TheHumans
  • a startup that adopts a "global market" posture from day 1: #GlobalFirst
  • a startup with a solid understanding of the market in which it operates, and its competitors. #KnowYourMarket
  • a startup that knows its numbers inside out, and can speak the language of finance. #Runway #BurnRate

For example, Quebec has developed significant expertise in artificial intelligence and the clean energy sector, and this continues to attract investor interest.

In addition, our guest experts tell us that value for money and data management are key aspects of today's venture capital industry. Finally, impact investors, although not the majority, seem to be less sensitive to changes in investment strategies.

how can incubators and gas pedals pave the way for their startups?

our experts reminded us of the best practices for helping startups become " VC-backable ".

  1. Venture capital funds expect to build relationships with Quebec's ecosystem of gas pedals, and the fact of having been accompanied by a accelerator, is a seal of confidence for an investing fund.
  2. Helping startups do their own due diligence on funds, including looking at investment theses to steer them towards the best investors.
  3. Invite funds to your events, so that they can meet start-ups
  4. Stay on the lookout for a pipeline of good startups for funds
  5. Become a member of Réseau Capital and attend their events.

Finally, it's important to understand that funds in Quebec are highly interconnected. They talk to each other and share files. They are also the ones who will consider co-investing together when they see that a company meets their respective criteria.

Remember, too, that getting burned at one VC has the potential to get burned at all VCs.

startup-entrepreneur relationships beyond spreadsheets: we need to be on the same wavelength!

There was also a frank and open discussion between Emmanuel Glen, founder of startup AWL-E, a deeptech company working in wireless electricity transfer, and Antoine Bellemare of i4 Capital, an investment fund that won the Quebec aid fund competition, and focuses on business projects with sustainable intellectual property, aimed at solving persistent and important problems in different industries.

At AWL-E, as in the relationship that the entrepreneur adopts with his investors, it's essential that the current flows!

The interaction between investors and entrepreneurs is an essential element in the success of startups. Emmanuel talks about the importance of collaboration between the two parties in realizing great ideas. He also stresses the positive impact of the presence of investors such as Front Row Ventures, and support players like Centech in his entrepreneurial journey.

It's with great passion in his voice that Emmanuel recounts his personal journey from passionate electrical inventor to ambitious entrepreneur at the helm (with 4 other co-founders) of the AWL-E startup that is now the envy of investors.

no "BS

Emmanuel has also opened up about the fact that he is an autistic person, and says he perceives social interactions differently, which is reflected in his transparency in his dealings with i4 Capital, right from the start. This authenticity is appreciated by his backers. No "BS!

Both partners also stress the importance of a good "fit" between a fund's partner profiles and investment sectors. For i4 Capital, it's crucial to have an in-depth understanding of a technology's potential and the markets in which it operates, without which it wouldn't have been able to identify the long-term potential of AWL-E's technology.

beyond the cheque!

in conclusion, the relationship between a startup and an investment fund continues long after the cheque has been cashed!

the relationship between entrepreneurs and investors is a partnership based on transparency, alignment of objectives and teamwork. Entrepreneurs must be authentic and open about their limits, while investors must be willing to listen and provide advice and support.

When there's a good "fit" between the two parties, big dreams can be achieved and successful startups can be built.