The evolution of Quebec’s private venture capital industry and sources of capital

August 2024

In 2003, following the bursting of the technology bubble and the poor results recorded by public and para-public funds, it was decided to redirect efforts to support the development of a private capital industry capable of (i) adopting North American best practices (expertise and networks) and raising capital beyond public and para-public sources in Quebec and Canada, and (ii) meeting the needs of the entire financing chain.

Remarkably, these objectives have remained those of all players in the ecosystem, public, semi-public and private, over the two decades since.

The purpose of this study is to analyze the results of these efforts and, where appropriate, to draw conclusions to further strengthen the venture capital ecosystem in Quebec.

The analysis highlights two conclusions:

  • INDUSTRY GROWTH: The first conclusion of this study is that considerable progress has been made since the early 2000s, in line with the objectives set out in the Brunet report: number and size of funds, number of managers and established managers, diversification of funding sources. Successfully growing this industry when, until 2013, North American circumstances were relatively unfavorable to venture capital (returns, fundraising) is a real achievement.
  • DIVERSIFICATION OF CAPITAL SOURCES: The second major conclusion of this study is that this ecosystem remains fragile insofar as the majority of managers remain highly dependent on public and para-public funding, and only a minority have become established managers capable of financing themselves mainly from private sources in Quebec, Canada and abroad.

 

 

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