The state of VC in Toronto

Last month, a panel of venture capitalists gathered at Techweek Toronto to discuss funding models, the state of investment in Toronto and how companies can learn to navigate the VC waters. Omers Ventures’ Brian Kobus, Extreme Venture Partners’ Sunil Sharma, Brightspark Ventures’ Mark Skapinker and Highline BETA’s Ben Yoskovitz shared their wisdom, and Real Ventures’ Janet Bannister moderated the conversation.

Failure can benefit the ecosystem:

“When you see a mature ecosystem, you also see bigger companies explode. We’ve seen some of those recently,” said Yoskovitz. “That’s painful, but it’s a part of the process. People are let go … but then those people are grabbed at other startups. And there’s a cycle of talent.”

Today vs. five years ago:

We’ve come a long way, said Kobus, who has been part of the investment community for a decade. “There’s a generally higher level of sophistication because there are so many more startup-related conversations

happening,” he says. “People know how startups work and where they tend to fail and where they succeed which results in a higher quality ecosystem.”

Toronto’s advantage:

“We’ve seen the list—we’re crushing it,” Sharma says of factors like Toronto’s livability. “We’re benefiting from certain things accidentally. The concentration of the downtown core is so positive for startup formation. The sleeper factor is the diversity.”

When to start the conversation with investors:
“Don’t wait to reach out. Stay in touch with key investors and let them know what you’re working on.” Kobus said. “As they say: ‘If you want money, then ask for advice. If you want advice, ask for money.’” Skapinker agrees with starting the conversation early. “We typically spend 3–6 months with companies before we discuss valuation,” he says. “We spend a long time with them—we’re going to be invested with them for [a number of] years.”