Owned by the Government of Canada, BDC is a Canadian Bank that provides financing, venture capital and consulting services to entrepreneurs. They are particularly focused on small to medium sized enterprises and have offices across Canada.
I caught up with Shawn Salewski, BDC Manager of Public Relations to find out more about the kinds of companies they invest in and their selection process:
Maura: What kinds of companies/teams does BDC invest in?
Shawn: BDC VC looks for innovative IT, health, and energy/clean technology companies, as well as venture funds, with high growth potential. BDC Venture Capital, much like other venture capitalists, looks for a seasoned management team, a solid business plan, a market opportunity to support fast and sustained growth, a distinct competitive advantage, and technology with broader applications than a single product or industry.
Why are you looking to invest in immigrant entrepreneurs?
We are looking for great ideas that we can help transform into great companies. Since venture capital investment is a highly specialized form of financing, the fact is, it is not right for all businesses. This means that BDC Venture Capital has to be extremely selective in matching the right financing to the right business opportunity. On average, we will review more than 1,000 business plans per year for prospective ventures, apply our rigorous selection criteria, and then partner with only a handful of the most promising companies.
What is the best way for immigrant entrepreneurs to contact you about investment and what should they send you?
Companies can email their documents to us for further analysis by one of our investment professionals.
What is your selection process like?
BDC Venture Capital will contact entrepreneurs only if we are interested in receiving further information about their business proposal.
Typically we will invest as part of a syndicate either as lead, co-lead or follower. Often, we will seek representation on the Board of Directors of our investee companies, and we encourage sound governance practices through the creation of a strong and well-balanced Board of Directors. We never own more than 49% of a company’s shares.
We use the following selection criteria when assessing a company’s potential for venture capital funding:
|Your company must have a distinct, sustainable and competitive advantage
Your company has intellectual property, substantial proprietary knowledge and technology ownership that provide significant barriers to entry as well as freedom to operate within the targeted vertical sector.
A technological platform
You have developed, or are currently developing, technologies with broader applications than a single product or market.
A highly skilled and committed management team with entrepreneurial flair
You may not have a full team in place at the time of our investment, but you are market-oriented and have the sound business instincts and experience that fit with your new role in the proposed venture. A commitment to partnership is key.
A clearly defined and realistic business plan
You have a clear strategy for success. You can quickly position your company in the competitive arena, and your highly focused management team is able to adapt to change.
A market opportunity to support fast and long-term growth
Your market is large enough to sustain many players with substantial revenues and high growth rates. The market must be international in scope, with a clear path to commercialization.
Dominant leadership in the marketplace
Your business could lead to a merger, strategic acquisition, or listing on a public exchange.
|A readily perceivable, constructive exit strategy
We seek return on investment commensurate with risk. Our exit is normally through an Initial Public Offering (IPO), a strategic sale or, in the case of companies with a strong recurring cash flow not wanting to sell or list their company, a leveraged management buy-out. We prefer investment opportunities that offer a three-to-five-year exit window.
A syndicate of venture capital investors
Building your company into an industry leader will require large amounts of capital and a shared goal of creating value. That is why we prefer to partner with other institutional funds that share our selection criteria and investment focus.
Inevitably, some prospective opportunities do not meet our selection criteria or present the type of growth that is suitable for venture capital funding. But as part of our commitment to helping Canadian ventures achieve commercial success, we immediately refer companies that don’t meet our criteria to the proper financing alternative within the bank.
If you like what you see via email, what’s next?
If we are interested in finding out more, one of our investment professionals will in touch with the company. Of note, as a participating organization under the Start-Up Visa Program, BDC Venture Capital will only issue a letter of support if we decide to fund their business idea (not just if we are interested). BDC Venture Capital plays no role in the immigration decision-making process and is expressly forbidden to provide any visa-related advice to applicants. In addition to the letter of support, entrepreneurs need to fulfil other immigration requirements to apply for a Start-up visa.
More About BDC
You can find out more about BDC by visiting their website, checking out their portfolio companies and following them on Twitter @BDC_VC. The BDC website includes a complete list of team members as well as their bios and photos.