On April 30, 2026, Canadian Family Offices hosted an online panel discussing venture capital (VC). Our expert panel looked at roles, risks and opportunities for family offices in the VC space. It was a captivating conversation, moderated by CFO managing editor Joe Chidley, that also looked at the overall Canadian VC landscape and where our panelists believe it sits today, as well as policy challenges, investment opportunities and a few standout companies the panelists are watching.
The panel featured:
Benjamin Bergen, CEO, Canadian Venture Capital and Private Equity Association (CVCA)
Prathna Ramesh, partner, FutureSight Ventures
Owen Matthews, chairman at The Alacrity Foundation and managing partner at the Emend Vision Fund
This panel discussion is part of our special report on venture capital and family offices. To see more content in the series, click here.
Transcript
This transcript is provided for convenience and is based on the audio recording of the video. While efforts have been made to ensure accuracy, minor errors are possible.
Joe: Hello, and welcome to today’s Canadian Family Offices panel presentation. We’re going to be discussing the state of venture capital in Canada in general, and where the opportunities and risks may lie for family offices. Three experts in the field have graciously agreed to share their insights and their experiences, and it’s my pleasure to welcome them here today. Our panelists are Benjamin Bergen, CEO of the Canadian Venture Capital and Private Equity Association (CVCA), Prathna Ramesh, partner at FutureSight Ventures and Owen Matthews, Chairman at The Alacrity Foundation and Managing Partner at the Emend Vision Fund.
Maybe we can start by having each of you (I’ve introduced you briefly), but we can start by having each of you telling viewers a little bit more about yourselves and what you do. Benjamin, would you like to lead off, please?
Benjamin: Yeah. Thanks, Joe, and thanks, folks, for joining us today. So, as Joe mentioned, I am the CEO of CVCA, but I’m actually the relatively new CEO of CVCA. I joined three months ago. And so, the work that we do at the organization really is representing private and growth capital as it relates to everything from seed all the way up to growth, and that includes everything from family offices to GPs, to LPs. And really, it’s looking at how is private capital showing up and supporting Canada. And so, the work that we do looks at everything from public policy on certain government programs like VCAP, or on things like taxation and capital gains. And so, I’mstill relatively new in the role, but I come at this from my previous job as the president of the Council of Canadian Innovators, which did work on, and were with, growth companies. So, I understand that side of the ledger.
Joe: Okay. All right. Thank you, Benjamin, and welcome to the panel, and welcome to the CVCA, I guess. Prathna, would you like to go next?
Prathna: Sure. Hey, Joe, and hi everyone. Nice to be here. My name is Prathna. I’m a partner at Future Sight. I’ve been an early-stage investor for about 10 years. I’mbased in Toronto. For the first five of those years, I served as the managing director at Maple Leaf Angels, which is a cross-Canada angel network of high-net-worth individuals and family offices. And over the last five years, I have been dedicated to basically incubating and seeding new AI companies. And initially, we were attachedto a single-family office, and since then we’ve branched off and are supported by many different family offices and have our own fund vehicles operating.
Joe: Okay, great. Thanks, Prathna. And last but certainly not least, Mr. Matthews. Owen, do you want to say a little bit about yourself and what you’re doing at Alacrity and Emend?
Owen: Sure. Thanks for the opportunity and hi to everyone. So, Emend Vision Fund is an early-stage venture capital fund. I’m the managing partner. I’m focused on industrial transformation, so large industries, doing the most damage in the world. And we look for the opportunities to bring technology to dramatically improve their impact on the world. And obviously to do a good job returning capital, seeing the best opportunities that we can in the market. With respect to family offices, this was an outgrowth of our family office, which is based in Ottawa. I’m based out west.
And Alacrity was a program that we started to help support the creation of companies, and it’s been a critical piece of support for a number of great companies. It’sbeen supporting Canadian entrepreneurs for about 15 years. And as a family office, we’ve been building companies for more than 50 years. So, lots to talk about in venture capital in Canada.
Joe: Yeah, for sure. And one of the things I really like about this panel and you three is that you all come at it from slightly different perspectives and backgrounds, and I want to hear more about the model, particularly at Alacrity and Emend Vision as well, Owen, later, but maybe we’ll start with a 10,000-foot view here, and talk in general about the VC landscape.
Now, Benjamin, I’ll direct this to you because the CVCA reported earlier this year that deal count, dollars invested, were down significantly last year. And I haven’t seen recent numbers for this year, but my guess is that 2026 being a relatively tumultuous year, hasn’t exactly reversed course yet. So, my question for you would be, just give us an idea of the general state of the VC industry today as you see it in the short term, and also what is the medium and long-term outlook from your perspective?
Benjamin: Yeah. So, I think, let’s start obviously with the short term. And I think all of us are acutely aware of the geopolitics that are fundamentally different from what they were 18 months ago, two years ago. And obviously, that’s increasing in terms of the volatility and really uncertainty of not just the venture space, but all businesses and all forms of capital deployment. So there’s that and then sort of coupled also with technological changes.
So obviously, we’ve all seen massive amounts of dollars flowing into the AI sector and large bets being made there. And so, the ramifications of these two factors, combined also with some historical past. We obviously had COVID and we had low interest rates, and we saw dollars flow into the space. You’re now seeing a market that has adjusted. You’re seeing a market that is a bit slower in terms of how deals and structures are being created. And you’re seeing fewer envelopes of money, but the money that actually is being deployed is often larger. And so, if you looked at CVCA’s data from last year, what you would see is essentially less numbers, but muchlarger envelope sizes, and particularly into a few particular deals, whether that be organizations like Waabi or Clio.
Looking at the short term in the first quarter, because we actually have some data that’s not going to come out till May 12th, so folks are getting a bit of a sneak peek, is a similar mirroring of that, where we’re actually seeing more capital being deployed in the earlier seed and pre-seed stage than we are in growth in Canada. And so, that’s sort of a continued trend. So that’s the short term.
What I would say in the medium and long term for Canada is that the fundamentals are actually still good. And what I mean in particular is that obviously we’ve got world-class research institutions. We’ve got centers of excellence in areas that are emerging. So think about something like quantum, folks may have been reading about Xanadu, which is an amazing quantum computing company that went public and over the last couple of weeks, I think, its founder, Christian, has become one of the wealthiest Canadians in a short period of time because we have world-class talent here in the country on something like quantum.
I think the other medium and long-term fundamental that we’re also seeing change is really the government’s focus on growth and on prosperity and really working to figure out what are the public policy levers that we can use from an industrial strategy to advance companies and help them grow. And so, I see there being tons of potential as we move into the more medium and long term for this asset class.
Joe: Okay, great. Yeah, we’ll get into the policy environment in a bit, but I just want to check in on Owen and Prathna. Is that sort of where you see it? You’re both operators in this space. Do you see that as consistent with your experience, what Benjamin just described, and what are the hurdles you’re facing now in terms of doing your work?
Prathna: I guess my lens on this, adding to what Benjamin’s saying, if I look at a leading indicator of this activity, it’s the pace of new entrepreneurship and the level of innovation. And I just continue to be mesmerized maybe or awed every time I meet with a different cohort and class of founders when I’m at the different community events and things. And so, I feel that, yes, there are so many structural issues, geopolitical issues, all of which have contributed to a compressed capital environment and global pandemic, et cetera. But that is not going to get fixed in one year or in a couple of years. And so, I think from my perspective, which is definitely much closer to the ground than Benjamin’s perspective, is basically the feeder is looking rich.
Joe: Okay. All right. And Owen, any thoughts on the general landscape?
Owen: Yeah, I think the most important thing to understand is that venture is countercyclical. When there’s lots of money around, valuations are high, and it’s not necessarily a bad time to invest, but you’re thinking in much shorter cycles because you don’t know when things are going to turn.
And if you think about vintage funds, the ones that make the most money are when money’s really tight, right. So, if you’re investing now, you’re getting reasonable valuations. Entrepreneurs don’t have ridiculous expectations of valuations. Money is tight. You get better terms. And you’ve got a few years to help build companies and then when things turn and valuations increase, you’re in a better position both to sell them because the larger companies have access to more capital, and valuations are higher in general.
So, venture is countercyclical, and one of the great advantages of family offices is they can behave in countercyclical ways. Pension funds and stuff like that, they’vegot to average out their portfolios and if the portfolios overall are down, then they’re going to allocate less money to venture. They’re going to call up their venture capitalist partners and say, “Well, don’t be drawing capital now. Cash is tight.” But family offices don’t have those restrictions.
So very good time for family offices to get into venture. We certainly have a lot in our fund and it’s a great time to be in venture capital in the early stage, because again, valuations are reasonable. So, I’m smiling and happy. It’s a kid in a candy store, reasonable valuations, great space to be in, increasing demands, lots of challenges.
When things are good and there’s lots of money floating around, the big companies think they can do everything. When money’s tighter, they start turning to smaller organizations to try and move quickly and solve some of their complicated problems. So for us, great times. And again, venture is one of those strange countercyclical industries. So from our perspective, it’s a great time to be in it, and when everybody thought it was booming, we were busy trying to sell everything we could because valuations were way up.
Joe: Yeah. That’s a good point. Sorry, go ahead, Prathna.
Prathna: If you don’t mind. So Owen, with what you were saying, I want to subscribe to everything you’re saying, and it’s great. And I feel some of it, but I can’t help but… Obviously, I feel a lot of it because I’m dedicating all my hours to this. But the part that I cannot ignore is definitely the tons of dialogues that I have and have had with Canadian family offices that don’t have an appetite for venture. And when they start hearing venture, they start asking about how this… They have the real estate or the private equity lens on things, and I’ve spent a lot of time on the education conversation. And then some people are just not interested, period.
And I do have the stories where they’re very positive, they’re so jazzed and love, want to be on top of it. So, I think it’s just finding your customer and what they’relooking for.
Owen: Yeah. My point was not that it’s easy times to raise money. That’s not true at all. And certainly, family offices in general, if they’re into wealth preservation mode, typically they’re not doing venture. I find that if you’re talking about getting involved in venture, it’s almost like teaching the next generation how to be entrepreneurial.They’re working with and looking over the shoulder of people who invest in early stage, high-risk stuff for a living.
So, it’s good for a next generation in a family office to work with venture capital, not throw money over a wall, but actually work with them. But yeah, no, raising money is tough. And certainly, family offices are often highly concentrated in one large business, which means getting involved in venture capital might be natural for them, but they’re often doing it inside of their family offices or inside their businesses. Or if they’re beyond that and thinking about wealth preservation, then they’ll have a mixed portfolio, and they tend to be pretty conservative.
But my point is, there is a big opportunity, and you can behave in a countercyclical way as a family office, that a lot of capital can’t. And it’s one of the great opportunities. When money’s tight and valuations are down, it’s a very good time to be in venture capital.
Joe: Yeah, you touched on a couple of important points there.
Our own research on multi-family offices, anyway, shows that venture capital ranks fairly far down in terms of asset allocation preferences, which we guess reflects a certain Canadian conservatism. But since you brought up family offices in VC, I’m wondering, I know internationally there are surveys that suggest that family offices and families make up a really significant chunk of investment in early-stage companies. Is that, and Benjamin, maybe you’ve got a view on this, is it the same in Canada? Do you get the sense, or are we kind of lagging behind in terms of family commitment to early-stage allocation?
Benjamin: Yeah. So, what the data shows is that really over the last 10 years, about between either 5 or 7% of dollars being allocated into the space comes from family offices, which is lower than other jurisdictions. Thinking about the US, where it’s closer to sort of 32%. And so, that number is significantly lower, and I think there are a number of key distinctions there.
I think one, obviously, where Canadian family offices have typically made their money. I think you really alluded to it, that it’s typically in certain large firms, and those have typically been in more resource extraction or have been in industries that are necessarily not as obviously familiar with the type of transformation that happens with venture capital and its deployment. And so, what we’re seeing is definitely a lower number, and part of the work is really going and explaining and communicating and working with family offices to help them understand the asset class.
And I think really, to some of the strong points that Owen makes, that it is countercyclical, and that there are really good opportunities to invest into this asset class as a way of creating a differentiator within your portfolio as it relates to how the market is functioning. So, Canada is definitely behind compared to its southern neighbour, but there’s tremendous amount of opportunity here.
Owen: It’s also the most patriotic thing you can do. When you’re deploying capital in big established companies, they can attract capital from anywhere. Venture capital in Canada is an underserved market. So, we’re not going to attract capital from the rest of the world into Canada, except in very particular circumstances. And as a result, we need the support. And the support that we get goes into building Canadian companies that employ Canadians and make us globally competitive. So it’sa very, very patriotic thing to do. It’s really important, as an asset class, to create the next generation of big companies.
They come from venture capital, and because we’re an underserved market, more of that will happen elsewhere if we don’t get the support we need to help early-stage companies in Canada.
So the next generation of big employers, the next generation of big market leaders, comes because of early-stage venture capital, and teaching family offices why that’s important, and why you can make great returns if you operate well in a countercyclical environment. If you follow good managers and work with them, you can make incredible impacts and have an unbelievable economic impact in Canada.
Benjamin: Maybe just to jump in on some of the elements that Owen is communicating. I think even some of the data that we’re seeing, when we’ve had firms be successful, and have large exits.
I think about Wattpad in Toronto, and you have Allen Lau and Eva Lau, having a very large exit, I think over $600 million. Them turning around and then turning their family office into an opportunity to invest in startups and scale-ups. And so, creating the full flywheel of capital in this country is critical. And so, I know we might get into that a little bit later, but we’ll talk about some of the programs that have been created. One of the areas where we see a very large gap in this country is growth deployment of domestic capital. And that has real ramifications on things like ownership, where companies’ decisions get made, and then ultimately, where all of the upside occurs.
So I think to echo some of what Owen is saying, making sure that we’re building a mature ecosystem is critical for family offices and for wealth creation to be formed.
Joe: Okay. Well, let’s talk about that ecosystem a little more generally, because it often focuses on… And we’ll get to the policy front, too. Actually, maybe we’ll go there first because Owen brought up that money’s tight, but the federal government has pledged to open up the taps a wee bit, with a $750 million support for early growth stage funding gaps. Did I get that right, Benjamin? Early growth stage and expanding the BDC’s Venture and Growth Capital Catalyst initiative, I think it is, to a billion dollars. Now, I know the conversation about VC in this country often talks about dollars from the government and government dollars, all that stuff. But I do wonder, what is likely to be, in your opinion, all three of you, what is likely to be the impact if this all comes together?
Benjamin: Do you want me to start?
Joe: Yeah, Benjamin, why don’t you get started.
Benjamin: So, I’m going to put folks in a time machine just for a moment, and the two programs that you announced, there’s VCCI (Venture Capital Catalyst Initiative), or VCCI Four, as it’s sometimes referred to.
Joe: Oh, I like that. VCCI Four.
Benjamin: VCCI Four is the billion dollars.
Joe: Okay.
Benjamin: And then there’s a new $750 million that was allocated in budget 2025 to be focused on early growth companies, so companies that are looking to scale.And part of the story is obviously we’re on VCCI Four, and so there was a VCCI One, a VCCI Two, a VCCI Three, and now we’re on VCCI Four.
And VCCI One, although then it was just VCCI, was created by Jim Flaherty, and that government at the time, in 2013. And really, its goal was to crowd in private capital into the venture space to make sure that we were beginning to create the firms of the future. And so, the majority of its work was in pre-seed, seed, Series A, and beginning to crowd in dollars, and it was successful. It did just that.
And then VCCI Two was a continuation to support a lot of that growth that occurred, and as folks know, venture investing does require certain vintages which need support along the way. And so, VCCI Three was a continuation of that, and VCCI Four is obviously an even further expansion of that.
But what it’s produced has been over 100 companies that are over 100 million in recurring revenue, and Sean Silcoff in The Globe wrote a story about this a couple of weeks ago. And what the $750 million growth envelope is meant to do is to provide later stage capital to these firms that have scaled over the last 13, 14 years through these supports of additional capital to crowd it in.
And so, the exciting thing is that as a country, we’ve actually arrived at the part of the journey where we actually have firms now that need growth capital in order tocompete and go global. And what we’ve seen is that predominantly, the majority of that money has actually come south of the border because we haven’t done domestic capital formation that specifically deals with growth.
And so, the goal here, really from the government, is not to fix a capital deployment problem, because we actually don’t have one at the growth stage. Any of these growth companies could get money from south of the border because they’re very strong and are generating revenue.
The problem is for Canada that we don’t benefit from the upside and so coming up with vehicles where we actually crowd in our own private domestic capital to scale is critical. So if done right, and if done in a way that achieves the policy objectives, the goal is to build out the full capital stack from seed all the way to growth. And to begin by doing that, the government is looking at crowding in more opportunities for capital at the later stage.
Joe: Okay. All right. Yeah. Owen, and Prathna, is this going to have an impact on what you do at all? Or what do you think of the policy question?
Owen: Yes. Good policy has a pretty big impact on venture funds’ ability to raise money. And generally, there’s sort of an aversion to first-time funds. So, having more capital gets more first-time funds up and running, and then they have a shot at being very successful. I would say the VCAP program, VCCI program, has been very successful at doing, putting money to work. And this is not a bill to the taxpayers to pay. This is not grants or anything like that. These are investments, and they’ve been successful investments.
The government did something pretty clever, which was to say, “We’ll defer our returns, and we’ll allow the returns to come to the private investors first. So we’ll put the money in early, and we’ll take our money out last.” But they were still very successful investments. And as a result, appropriate policy to stimulate an industry that doesn’t actually cost the taxpayers much of anything. So, in general, very good.
When you focus on the later stage, I think we have to be careful how we do that. So, I was speaking to a major bank in Canada, and they recognized exactly what Benjamin is saying, is that there’s capital lacking at the later stage, and most of the investment is coming from south of the border. And all true, but how do we address it?
And if we were to say we need more Canadians doing that, I actually disagree. I would like to see more Canadians participate in those gains, but a successful company in Canada will attract capital from the best places that offer the best terms and the best deals that are not likely Canadian. So, if you have a really top-notch firm in the US putting money into an emerging company in Canada, we should celebrate that. And they will have a bigger and better impact just because of their scale and because of the number of businesses, and the ability that they have to do this is far greater in the US. We want not just their money; we want their expertise as well.
So, every company that I spoke to, if they said, “Oh, well, if there was a big Canadian fund, would you take the money?” They went, “Well, no. Why would I?” So, if we focus on the early stage with follow-on rights and the money was there to participate in the follow-ons, I as a fund, really am only deploying capital for five or six years.If those companies that I’m investing in, I’m sure some of them will be very successful, then I no longer have the capacity to follow on.
So, if you’re supporting the early stage, much like the VCCI programs did, and there was a pool of capital to participate in the larger companies, we can still get the expertise and the significant capital, a global market of capital for absolutely the best capital we can bring in to our growing companies. But if we’re doing that, let’shave the Canadian ability to follow on. So, if you had a pool of capital, like VCCI, that was available, that was in the early stage, then its ability to follow on and exercise the rights of the follow-on rights that are no longer in the small funds because they’ve tapped out, then we can maintain the Canadian returns without limiting the company from going to get the best capital and the best expertise.
Joe: Okay. Benjamin- Sorry, go ahead, Prathna.
Prathna: Plus one on everything Owen said. Completely agree with those comments, and valued all of your input, Ben.
I think that the angle really should be having the follow-on rights because what’s happening is the companies get funded at pre-seed and maybe seed but then seed plus up until A is the valley of death. And with AI, I think the game is changing a little bit. People are saying, “Oh, maybe we can avoid some of those larger rounds and that extra dilution at that stage.” But if this envelope or any policy can improve, I guess two areas. One is catalyzing more capital from the private markets to want to participate in the asset class. I think that’s positive, and if any of this can go into emerging funds as well, that are targeted on the gaps that exist in the funding journey.And then, definitely I think about our portfolio. The ones that are Canadian based, there’s kind of like a road map that says, “This is how you’re going to tap the US market for funding.” So yeah, anything to fill the gaps is good.
Joe: Okay. Benjamin, do you have any thoughts on those points of view?
Benjamin: Yeah. So, I think definitely if you look in the data in terms of funding, whether that be anywhere from seed to early growth, there are gaps in terms of capital deployments within the country as it relates to domestic dollars. So, this is a challenge.
And so, I think to Owen’s point, at the firm level, in growth, there’s not a challenge for accessing capital. They will find it. The good firms will find it. And to Owen’s point, they often want smart money.
They want money that connects them into a network, and they want money that connects them into finding the best talent. And so, from an individual firm perspective, that is the path that they typically will move forward on. The challenge more broadly for Canada is the capturing of the wealth from obviously the upside that occurs.And so when we’ve done, let’s say, investments as Canadians in things like SR&ED or IRAP or other forms of grants or subsidies, we’ve brought them to this incubation state, and then as they’re really beginning to accelerate and where the value and upside occurs, we find ourselves without certain vehicles or even organizations that can do that type of investing. There’s very few that are actually in that growth phase.
So I would say, to be very clear, I’m not for autarky and I’m not for specific policies that shut out these firms being able to access capital, but finding solutions where we as Canadians can crowd in opportunity for us to own more of the firms that we have incubated and then capture that upside is critical in order for us to return and create wealth and prosperity for the country.
So it’s more of a macro public policy issue, rather than a micro, in terms of where it applies on the growth side.
Joe: Okay. All right. Let’s move on, staying in the policy realm. What other policies would you like to see? And I’ll address this to Owen and Prathna first.
I know, for instance, the government has floated the idea of extending flow-through share programs or structures to technology companies. Is that a good idea? Or what else would you like to see outside of here’s a big bucket of money? Owen, Prathna?
Prathna: Owen?
Owen: Sure. Yeah, I’m not a tax accountant, and we have seen certainly out here in British Columbia some flow-through share structures, the labor market funds and stuff like that. From my perspective, it’s always fundamentals. How do you get the truckloads of money that are spent in easy ways, like giving it to universities for research or centers of excellence and stuff like that, how do you get that to be effective with respect to company creation?
And in my view, family offices have always been central to that. They’re typically connected to significant business, they’re connected to real industrial needs, and they bring opinions like, “If we only had whatever this thing is in the market, we know it would be successful.”
So our program at Alacrity was always focused on understanding market needs and, in general, if we could shift the policies towards commercialization as opposed to research. That seems to be the major gap. There’s a major focus on funding for universities.
When I created the Alacrity program, I did it with universities simply because I could double my budget by doing it inside of a university, and the whole goal was to get the teams out of the university as quickly as possible because they have this sort of like, “Oh, well, that’s an interesting problem. Let’s look at it,” as opposed to, “No, we’ve got a customer, we got work to do, and we got to go solve that problem right now, and the clock is ticking.” But there was just very generous programming dollars inside universities.
So, I’m an advocate of commercialization being the thing that we need to concentrate on. If you look at the US, the funding for commercialization is maximized, and the funding for research is on the smaller end of the scale.
And here we’re the opposite. We fund heavy research, which doesn’t go anywhere typically. So, from a policy perspective, I’m always in favor of commercialization to get more people started and having engineering schools include entrepreneurship. So a lot of engineering schools, I hired a lot of engineers to create a lot ofcompanies at Alacrity. We created companies from scratch that didn’t exist before. I think the valuation is about $1.8 billion now, that didn’t exist prior to us encouraging the engineers to create the companies.
If you turn to an engineer and you say there’s a path, it’s not a giant leap of faith, like I’ve got an idea, the myth of entrepreneurship. “Oh, I’ve got this idea and I’m going to prove to the market, come hell or high water, that I’m right.” It’s all a myth. If you have a path, like you understand that there’s a customer opportunity, and if you work with me as an investor and you deliver on that customer opportunity, then you’ve got a company and the company’s likely to be successful, that’s a path an engineer can calculate. And instead of going to take a job somewhere south of the border after our tax dollars have paid for their training, instead they see an opportunity to do it here, and they can attract venture capital and grow.
So from my perspective, the policy should always be skewed towards commercialization. We should have programs like Alacrity, but please copy it and do it as manyplaces as you can. I know some people on the call here have been actively involved in other programs that do that. We need to get people to realize that the entrepreneurship journey is one that’s based on commercial needs. The goal is a successful company, not to prove that you were right with your idea.
And I like policies that do that. And yes, we have some good policies in Canada that support entrepreneurship, but they kind of lean towards engineering as opposed to commercialization, and we should be tipping the scales the other way.
Joe: Okay. Prathna, I’m going to give you the floor if you have anything to add on the policy side, and we’ll get back to the Alacrity Foundation too.
Prathna: I mean, how would I ever follow you, Owen? Just some mic-dropping gems.
So, on policy, yeah, I do find that we are focused often a lot on the upside conversation, like what we’re constantly thinking about that, the iteration, the finding the adjacent markets. So that’s really where my focus is for the portfolio, how do we…
However, when I was very active in the angel communities, we were more directly advocating for the angel tax credit because we could see directly the individuals and the impact it would have. Because I think Owen had said, his horizon as an investor is five to six years, so you do need that entire flywheel that Ben talks about, people exiting, money coming back into the ecosystem. So yeah, totally, there’s a space for policy.
And I feel like the cyclical nature of the market, I haven’t been investing for 30 years, but in the 10 years itself, I have seen movement and high swings and then a lull period where meetings and events with angels and LPs are so poorly attended. And then it’s so richly attended and just the FOMO is high again.
So I think, yeah, this has to be thought through and over a multi-decade type of program with the objective of stimulation.
Joe: Right. So, a long-term policy.
Owen: Prathna, you mentioned the tax credit, what an impact that had in British Columbia, and they just extended that to, Manitoba’s got a very generous tax credit.
Just like VCCI, the investor is taking the risk, and the government’s not choosing who to support. The investor takes the risk. And same thing with VCCI, they just do it at a fund-to-fund scale with VCCI. But the investor takes the risk. If they make a mistake, they lose money. So somebody has to convince them it’s a good business, and smart people risking their own capital is the right measure, is the right way to run a program.
Government softens the blow by providing tax credits, which was very, very generous in BC and had a huge impact on startups in BC. But the truth is, government gets it all back. That money gets spent in BC with employees in BC, people who are getting paid that wouldn’t otherwise have gotten paid or may have left the country. It all comes back in tax revenue.
And if you get wins out of it, they get a lot more back in tax revenue. So these are investments. But yeah, tax credits, Prathna, great policy.
Joe: Okay. Ben.
Benjamin: So maybe just to jump in on a couple of these pieces. I very much agree with both of your comments. One of the things we’ve been calling for at CVCA is a royal commission on tax competitiveness. We haven’t had one in this country since the 1970s. And so how are we thinking holistically about how we need to be thinking about the tax structure in order to compete with other jurisdictions, and obviously the big one being south of us. So, I think tax is definitely a big piece of it.
The other way to look at it, and I think the commercialization debate is really the right one to be having, is what’s required for that. And I think about it a little bit like a triathlon. You’ve got to be good at running, swimming, and cycling. And if you want to commercialize a product, you obviously have to have product market fit, but you’ve got to have capital, talent, and you have to have customers.
And I would say the real area where we struggle to win a gold medal sometimes in this country really is on the customer side. We see that our own federal and provincial governments and municipal overwhelmingly procure foreign rather than domestic solutions. And if you look at successful innovation economies, whether it be US or the Nordics or South Korea, you see using government procurement really as a lever to act as a purchaser and to help companies scale and grow.
And so, I think we’re seeing much larger now conversations around how government can actually be a purchaser of these solutions, because any company in the startup space or scale will tell you that they would prefer a purchase order over a grant or a subsidy or a tax credit any day of the week.
And so, I think as we think about what’s required for commercialization, that customer component and procurement piece, I think, is a really big one to make sure that we’re considering.
Joe: Okay. All right. Good point.
Now I just want to get off policy a little bit, although policy, of course, is the big thing that informs everything. So let’s set that aside, and I want to get back to Owen because you’ve talked a bit about the Alacrity Foundation and its development model. I wonder if you can go into a little bit more detail, like when did it start, how did it start, what does it do?
Owen: Sure. So, I started a technology company when I was young, when I was in school. Ended up listed on NASDAQ.
Many people would assume that coming from a family office with a very famous entrepreneurial father, a guy by the name of Sir Terry Matthews, would make that easy.They may not know my dad very well.
When I convinced an investor to give me money to start my company, my dad called him up and said he was an idiot and shouldn’t give me the money because I’msupposed to be in school. So, not all was easy.
So, I ended up starting the company, it ended up listed on NASDAQ, then I felt like I’d developed some credibility. My dad asked me to join the family office. I was based out west. And he said, “Go build a portfolio out in British Columbia.”
And I said, “Sure, that’s great. Do I have a budget for a secretary and office?” And he says, “No.” I said, “All right. Well, I’m supposed to be investing. Do I have capital to deploy?” And he goes, “No.” I said, “Okay. Is there an investment committee that I can go to, to say I want to do this deal?” And he says, “No.” “Okay, great.” So basically, I got nothing to work with.
So, I created Alacrity because I turned to, at the time, Western Economic Diversification. Now it’s changed name to PacifiCan, and Government of British Columbia.And they said, “We see what you’ve done in Ottawa. We like the model of you creating companies. We would support you doing it here. Please, can you do it here?” So, we had not a lot of money. I think Western Economic Diversification gave me something like 900 grand. And we could hire engineers, give them grants, and then we would use the engineering machine, the university machine of NSERC scholar money, and faculty graduate studies money, and all these other levers. And we would recruit engineers that were not planning to be entrepreneurs and say, “We have this great asset,” which is access to a whole pile of companies, and my dad has been an active investor for more than 50 years. So, we had a big portfolio of technology companies, and we could understand the needs.
So, we said, “If we can point you in the direction of known needs that customers are interested in, then we’re likely to build successful companies.” And it worked fairly well. We started about a dozen companies, and I said valuations are in the sort of $1.8 billion of companies that wouldn’t have existed without us. So, it was a pretty successful program.
The key part of it was that we needed to be evergreen. They didn’t want us to have a handout going to government all the time to run this program, so we took founding equity, which is easier to do. One of the challenges with accelerators is that the cap table’s already set up, so it’s really hard to take a piece of the equity.
When you’re creating companies from scratch and you’re forming the company with the founders, it’s much easier to take a significant stake in the company.
So we were able to take a significant stake in the company, and the successes based on that led to our ability to have investment capital, and actually led to the EmendVision Fund because the capital that we’d created was available for us to create a venture fund. So, it’s been a very successful program. We operate across Canada.
My dad’s a pretty smart guy. He realized that I was able to create a program that didn’t involve a lot of investment capital and a portfolio that had a fair amount of equity in it, so he copied it. And he created an Alacrity program in the UK, in France, in India, in Mexico, in Turkey, and tried to do it in a few other places.
Joe: Nice.
Owen: So it’s a really interesting program. It’s very successful to create early-stage companies and has returned capital to a whole pile of investors. So in general, we’re pretty proud of that work.
Joe: Yeah. So, your dad got a neat little business model out of it and didn’t even invest in an EA for you. That’s good. Good for him. That’s good return.
And I’m interested because in some ways, it’s similar, I think, to Future Sight’s approach too, right, Prathna? Could you run us through that?
Prathna: Yeah. I’m so delighted to hear that from you, Owen.
And I didn’t realize this was how deep you’ve been in this, and the model that you’ve built over years. And here I was telling ourselves that we’re doing something unique every day.
Owen: Well, it’s good. More people should do it.
Prathna: Yeah, no, it’s great. So, I think the best summarization of what I think we’ve built operationally is basically a company factory that has different engines running, different teams and engines running, and we’re constantly trying to optimize and be more efficient and compound learning.
So there’s a team that’s kind of looking at the entire labor market and what opportunities are going to emerge now with AI. Then there’s a team that’s solely dedicated to talking to new founders, building founding teams, team dedicated to customer commercial development, validation, then product development, and that way, essentially, we own a lot more of the company. We’re co-founders. We have a large voice in the company through the journey. And yeah. I think it’s a very exciting model to be able to live out every day.
Joe: So how do you work at Future Sight with other families? I know your origins were in an SFO, but how do you work with other families along the development journey for the companies that you’re interested in?
Prathna: So, a couple of different ways. Early on, we realized that there’s an amazing, strong network of family offices around us who we could potentially be doing business with together. So what we started doing is we started shopping around the concept for ourselves, like, “Hey, we want to create these new AI first companies, and here’s the team we’ve assembled to do it. Here’s the methodology.”
We then started seeing families who are friends basically want to participate, whether they’re running an operating business today and they want to be a design partner with one of these new solutions that we’re launching, or if they wanted to be a co-investor as an early investor in some of the companies.
And then as we started seeing families get interested and seeing that, okay, these companies are going out there, people are externally valuing them, and there’s a lot here, then we opened up a vehicle for families to invest directly into an LP/GP type of structure.
But yesterday we had a gathering with a number of the families that we’re working with, and they’re all, you know they’re entrepreneurial, they’re here to learn, they’revery curious and hungry about what this new generation of AI first orgs look like, right? And things are so much more capital efficient and what does the next 10 years of new companies and ideas and markets look like.
So the people participate in brainstorm, people participate with their capital, people participate as customers. So, we’ve kind of created a community that way.
Joe: Okay, cool. Ben, any thoughts on the need for development models along with good policy here?
Benjamin: Yeah. So, I think a couple pieces there, and as we think about why family offices are investing in this asset class, obviously there’s the returns component to it, and there is the, as Owen mentioned, obviously the countercyclical opportunities for investing in it.
And one trend, though, that we really see emerge is really around charitable foundations. And a model that I would point out is the Cancer Breakthrough Fund, where family offices are wanting to have mission and positive outcomes for their community. And so, whether that be environmental or fighting things like cancer, you see these new types of models being created right now in Canada in an interesting way.
And so, as an example, the Cancer Breakthrough Fund is partnered with the Terry Fox Foundation as a particular example. And so there you’re seeing obviously dollars being deployed through a foundation, which then obviously go out and work to solve those problems and then recycle that capital back into the foundation to continue its longevity and continue it into the future. So, I think we’re seeing some interesting new models being specifically created for funding formation in the ecosystem.
Joe: Okay, great. I want to talk … We’re actually tight on time. I do want to talk a little bit about, Ben, you talked a bit about where you see opportunities, particularly venture capital opportunities in Canada.
I want to get Owen and Prathna’s take on that as well, but maybe Ben, recap those for me, and then Owen, maybe you could talk about the focus of Emend Vision, and Prathna, the AI focus for Future Sight. Okay?
Benjamin: Yeah, sounds good. So, in terms of where I think there’s obviously opportunity, we talked about it a little bit, obviously us having amazing academic institutions and basic research, and what is some of that cutting edge technology that’s coming out of those spaces.
And so obviously things like quantum computing is obviously a big one. I mentioned Xanadu earlier, but there’s living proof of new and emerging spaces. I think the other big one, obviously, would be around life sciences and the area where we actually have some real competitive advantages as a country. And then, the last area is obviously in defense and dual purpose and dual use.
So, Canada has committed to meeting its 2%, or we have reached our 2% NATO commitment, which is going to rise to 5%.
So, we’re going to begin seeing billions of dollars in procurement dollars flowing specifically to solutions, and the government has made commitments of buying Canadian. So, there will be investment opportunities within this asset class.
It’s different than typical industries because of obviously it potentially being a monopsony where government is the sole buyer, but there will be opportunity here for investors.
Joe: Right. So, the procurement side, that’s kind of like accelerating commercialization, right?
Benjamin: Correct. Yeah.
Joe: Okay. All right. Thank you. I’m just zipping along here because we’re tight on time. Owen, can you talk about Emend Vision again and the focus of the fund?
Owen: Sure, yeah. Emend Vision fund is focused on the very large industries in the real economy, energy, agriculture, water treatment, construction materials. The most damage that gets done in the world, the biggest impacts are from these very large industries.
You could be a very good citizen, and you could recycle your bottles and your cans religiously, and yet the entire building that you live in, and you work in is going to the landfill, right? So the system around us, the big industries around us are the real challenges. And they’re under enormous pressure to change. Every building bid, everybody in the major contracting space tells me that they want to meet the objectives, and the customers are demanding that they meet certain objectives, but the current supply chain doesn’t exist to make that happen.
So, things like biggest environmental issue in the world is methane. Greenhouse gases, there’s only about 10% of greenhouse gases are methane, but it’s 80 times worse than carbon. So, biggest environmental issue. We could meet all of our environmental greenhouse gas goals if we just stopped methane leaks.
So anyway, dealing with the biggest problems and giving them the technology they need to make money or save money, you have to have a viable business that makes sense. But ultimately, creating the innovation necessary to make a major impact on the world is our focus. We still do the same work, creating companies if necessary to fill the needs. In general, we are looking for great companies that have traction. It sort of reduces the risk. And a lot of families involved in that.
So, there’s a lot of great families who may have been in traditional sectors that want the next generation to perform better, leave less of a negative footprint on the Earth. So, we’ve got a lot of great family offices involved. And most of the time, we open up the fund as much as possible to share what we do so that the next generation in a family office can learn.
And they’re not learning from a single wealth creator. They’re learning from an outside group that can coach a little bit as opposed to a single strong voice from a wealth creator.
You talk to any family office, they’ll talk about business, they’ll talk about investment returns. Within five minutes, they’re talking about the kids and what they’re really worried about. And we, as a fund, try to open ourselves up to coach and support and work with next generation. And it’s just really, really important. And family offices in Canada are a gem. They can do things that a lot of typical institutional capital can’t do.
So for us, Emend is a vehicle for that, to try and teach and train and create great returns and help people make a great difference in the world.
Joe: So you mentioned getting people involved, getting the next gen involved. So what’s the point of that? Is it longevity? Is it education? Or are they looking for ideals or interest, or…?
Owen: If you can teach risk-taking and get next generation wealthy families into entrepreneurship, and they get to look over our shoulders a little bit, we get to look inside their businesses for opportunities, work with them to determine what the opportunities are, and build companies around it. They’re doing exactly what they should be doing to support the Canadian economy. They’re doing exactly what they should be doing to be good stewards of their family capital. And we’re proud to play a role in that.
Joe: Right. Okay, good. Prathna, do you want to talk about AI and your focus there?
Prathna: Yeah, happy to.
Joe: We have about four minutes left, but I do want to-
Prathna: Yes. I’ll zip through. Yeah, so we’re a pure AI fund, so we’re building two types of companies. AI agents, autopilot, not co-pilot, that are completely replacing job functions.
And then the second category is AI professional services, so AI insurance broker, AI recruiting agency, insurance broker, and so on. I think the big thesis is that reasoning is becoming really abundant. So the main question that everybody’s grappling with is, what are the modes? Who’s going to win? And so how we think about that is there’s basically work that you can do as you’re building out these businesses. We call them internally critical enablers. We have these six critical enablers that build a defensible company in the AI world today.
And the two main questions that’s answering is, one, can it do real work? And then two, does it become really hard to displace within that environment? Especially because everybody’s concerned about this era of vibe-coded solutions that can be spun up in hours. So I feel that we’ve got a very strong process and rubric around assessing, one, the market opportunity, two, how this product interacts with the workflow, with the customer. It ensures that it has appropriate context, data access, there’s an institutional memory being built, et cetera.
Who we work with. We work with exclusively repeat entrepreneurs. So on average, a FutureSight founder has built two and a half businesses in their past, and they’relooking to supercharge their knowledge in a particular domain with this AI-first builder to basically launch a venture-scale company. So that’s the mission we’re on.
And yeah, I think in terms of family office involvement, it’s similar to what Owen is saying. It’s like if you’re in a traditional industry, if you’ve been building a company, if you want to be part of the next wave of how technology’s going to impact businesses and industries like that, we definitely want to talk.
Joe: Okay, great. Thank you. I do want to end with one last question.
One of the things that often gets raised when the discussion focuses on risk capital, and including venture capital, is Canadians’ inherent genetically coded risk aversion and a policy environment that doesn’t encourage it, blah, blah, blah, blah, blah.
Is that true? Or more important, is it changing, I suppose? My sense is that it is, but I want to hear what you guys think.
Benjamin: So I’ll be blunt. I think the culture debate is nonsense. I think somehow, in viewing that we, as Canadians, don’t have fire in the belly, candidly, is an excuse.An excuse for building the kind of conditions that make Canada the most competitive jurisdiction in the world to compete. And so, I think if we say culture, it allows us to rest on our laurels and build a system where we don’t have to be as competitive.
And so, 140,000 Canadians left last year to go to jurisdictions where risk and reward is sometimes considered a bit easier. And so, we do have all the elements. There’snothing genetically coded in terms of difference of who we are. It really is, have we built the right types of policies and structures in order for us to be competitive and for people to take that risk in order to get that reward?
Joe: Okay. Good answer. Prathna, your thoughts?
Prathna: Could you reframe the question for me, please?
Joe: So Canadians are often accused of being risk-averse, particularly when it comes to VC. Are you seeing that change, or is that-
Prathna: Founders or investors? Or everybody-
Joe: Investors.
Prathna: Yeah. Okay, investors. Investors. Yes.
Joe: Okay.
Prathna: I think Owen’s going to say a lot.
Joe: Okay. Owen, last word.
Owen: I can be really quick. Sure. Thanks, and thanks everybody for the time. It was great. I don’t look at the data, so Benjamin’s way better at that than I am. But in my experience, I find very hardworking, people willing to take great risks.
And it’s not cultural at all. Most people that I’m around are very interested in taking risk and building companies, and excited about investing alongside us. So, I don’tsee it. I think that our institutions might be conservative by structure, and that’s wrong. We should absolutely be favoring Canadian technology companies all the time.Every other country in the world does it.
We institute inside of our organizations this set of rules that are sort of Boy Scouts, as opposed to bending the rules. Yes, we follow the World Trade Organization rules and stuff like that. So does everybody else, but everybody else sort of bends it to their favor within whatever they can do. And we try to follow the letter of the law as opposed to actually doing what’s right for Canadians, and we set our institutions up to do that, and it’s wrong.
As people, we’re out there taking risk and doing all kinds of stuff all the time, and our institutions are set up to prevent buying Canadian. Our institutions are set up to bid to the lowest dollar regardless of where it’s from as opposed to favoring Canadian, getting involved in test beds, which you’re allowed to do under World Trade Organization rules. And if you set up a test bed and you understand what the requirements are because you’re working with a Canadian company to do it, then the Canadian company’s going to meet the requirements and win the bid. If every other country in the world does it, why aren’t we doing it?
And having people who are rewarded for saying no, or rewarded for feeling like they need to buy the foreign company because they’re playing the game better and they’re pricing it differently or whatever, as opposed to saying, “Well, no, I’m going to go out of my way to favor the Canadian company because it’s the right thing to do.”
Joe: Yeah.
Owen: We just don’t have enough of that institutional support. It’s not the people. The people are willing to take risk and do whatever they can.
Prathna: Right.
Joe: Yeah. Okay. All right. With that, I think we could probably talk about that for another hour at least. But time does not allow.
So I just want to quickly say thank you to all three of you for taking part in today’s discussion. It was fantastic. Lots of great ideas.
I hope policymakers are listening. I hope family offices are listening, too, because I think a strong case was made for more exposure to VC and why it’s the right thing to do.
So Ben, Owen, Prathna, thank you. Well done. And let’s stay in touch. And thank you to everyone who tuned in today. Bye-bye.
Benjamin: Thanks, folks.
Prathna: Thanks, everyone.
Owen: Thank you.
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