A New Fund and a Long-Term View During Chaotic Times

It’s been a challenging last few months in the financial markets. That pales in comparison to everything else going on around the world, but it is a useful reminder that the tech community is not immune to the realities of the populations it seeks to serve. A variety of these macro and micro-economic factors have changed the capital raising environment for founders after an extraordinarily bullish run. As a result, sentiments within our ecosystems have been very reasonably tempered downward.

I understand the angst. And yet, after more than 12 years in this business, I also see plenty of reasons to remain optimistic.

I can’t tell when this will pass. I do know for sure there still is capital available for companies with solid fundamentals and working towards inspiring goals, including the US$325 million we just raised for the fifth early-venture fund that we announced today.

A good business is still a good business

We intend to deploy this fund with the same principles that have helped us navigate the ups and downs of markets since Inovia was created 15 years ago. We will be looking for teams uniquely situated to attack real problems, and this capital will support companies that can stand the test of time and have what it takes to become industry leaders. Our entrepreneurs will have global ambitions and prefer buying to being bought.

When we find this right fit, we will be there alongside portfolio companies at every step of their growth journey, sharing our experience, expertise and network to make that path a bit smoother. Our aim is to be a go-to resource, a facilitator, and a calming influence during chaotic times.

We’re well equipped for it. On top of being the largest early-stage investor in Canada, we manage two growth-stage funds and a recently closed continuity fund, which together enable us to accompany companies from seed to IPO, and beyond with over US$2.2B to invest in their success. Today, about one-third of our growth fund portfolio companies come from our venture funds’ investments, including category leaders such as BenchSci, AlayaCare and AppDirect.

Over the past few years, we’ve also recruited several skilled executives in talent, product, engineering and corporate development. Their expertise, and the combined entrepreneurial experience on the Inovia team, are just a phone call away for our portfolio companies as they scale up.

Looking beyond the slump

Long-term trends are supportive too. The Canadian ecosystem is mature, and the entrepreneurial spirit is vibrant. The digitalization of our economies, which accelerated during the pandemic as work-from-home habits sank in, has leapt forward half a generation. International markets for talent, customers, and capital are more accessible than ever.

Founders will eventually be rewarded for the hard work they’re putting in now. In the meantime, the current market conditions create a new environment that business leaders must acknowledge and adapt to. With capital harder to come by, they’ll need to operate and act responsibly so as not to let external circumstances determine their fate. Creating this optionality means having ultimate ownership over their destiny.

Will success take more work and more time than it would have six months ago? Maybe. But businesses with a strong operating model that builds value for customers, employees and other stakeholders will still have a bright future. We believe in that adage, and these new resources will help shape that into reality.

Of course, starting a business at any time is a bold bet and an incredibly irrational thing to do. But there is something magical when you get the right combination of irrational people around the table, coalescing around the opportunity to make a dent in the world. That’s what gets us going, and that will continue to allow great founders to build great companies, irrespective of market cycles.

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