New fund, less funds

Talk about spin. Here is a piece from the Globe and Mail about fresh money being raised by new venture capital funds: Veteran venture capital firm launches $105-million fund. Either this is pure spin, or they have missed the glaringly obvious: Celtic House raised $225M in its previous fund (in 2005), and only managed $105 […]

Talk about spin. Here is a piece from the Globe and Mail about fresh money being raised by new venture capital funds: Veteran venture capital firm launches $105-million fund.

Either this is pure spin, or they have missed the glaringly obvious: Celtic House raised $225M in its previous fund (in 2005), and only managed $105 in this one, and of this, a huge chunk is from the BDC.  That is the venture capital equivalent of a serious down-round, with only a government back-stop saving it from being a complete disaster.

To put this in perspective, Celtic House has possibly the best pedigree of any VC active in tech in Canada: closely associated with Sir Terry Matthews (Mitel, Newbridge, …), he and it have been involved in a number of important successes, especially in telecommunications.

Admittedly the era of investment wins in telecommunications (both hardware and software, such as the late Bridgewater Systems) is over. However, either Celtic House is sitting on some awful portfolio returns, or the prospects for venture capital in Canada are truly dismal.

Neil Milton