Startup funds and seed capital: BCF's network into action

November 9th, 2017

This past November 2nd, BCF brought in the representatives of four new investment funds to share their experience and talk about the challenges the industry faces in 2017, as part of a panel organized by Réseau Capital in partnership with BCF and Investissement Québec.

The panel discussion gave the participants a better grasp of the various strategies deployed by these funds and their positioning, based on their respective specificities and ecosystems.

Presented by BCF Partner Mireille Fontaine, secratary of of Board of Reseau Capital, the panel consisted of Richard Bordeleau, President of Fonds Innovexport, Sylvain Carle, a partner at Orbit, Richard Cloutier, President and CEO of Ecofuel, and Élizabeth Douville, senior partner at Amorchem. Sébastian Boisjoly, Director, Venture Capital and Investment Funds at Investissement Québec, acted as moderator.

After presenting the purpose of their respective funds, the panellists answered questions put by Sébastian Boisjoly.

“Amorchem is a seed capital fund dedicated to the life sciences, and we look far upstream to find innovative technologies in the therapeutic field,” explained Élizabeth Douville. “We incubate them and arrange for them to bring their projects to maturity, then we present them to the ecosystem. The process is overseen by a group of five partners who have the scientific expertise. We identify interesting prospects and take them to the business stage. There is unbelievable innovation in the universities, but it takes time and patience to determine which projects should be developed and will be viable.” Orbit is a fund that works with new technologies and has facilitated 80 startups in four years. Ecofuel, meanwhile, works in the clean technologies sector, with eight to 10 businesses in each cohort. Although it is a seed capital fund it also acts as an accelerator.

“Businesses across Canada apply to us for funding,” says Richard Cloutier, Ecofuel’s president and CEO. “There are 10 times more startups today than in 2005. Our ecosystem has grown. It is interesting to note that for every dollar we invest, we attract five to six dollars of foreign money. There is truly a leveraging effect.” As for Fonds Innovexport, it is based in Quebec City.

“In Quebec, there is a significant industrial and technological fabric,” says Richard Bordeleau, Innovexport’s President. We wanted to create a fund that would help businesses get off the ground, grow and become successful, providing a financing continuum to help them pass from the pre-income phase to the recurring profits stage. We can provide up to $4 million in financing for a business. We work with partners, including Investissement Québec, the Fonds de solidarité, the Caisse de dépôt, and Fondaction. When businesses emerge from our process they are already on the radar of these institutional partners. We presently have about 15 businesses in our portfolio.”

Seed capital funds are continually evolving and must adapt to market changes and the needs of developing businesses. The four funds that were introduced must therefore frequently adjust their method of working with startups to improve the chances of their success. At the end of the day, the panel allowed the attendees to gain a better understanding of the issues, how the funds operate, and the criteria they rely on to select which start-ups to back.

To see all the pictures, click here.