Market Commentary
October 31, 2011
Tim Lee - Chief Investment Officer, Venture Capital, GrowthWorks Capital
In its February 2011 report on the venture capital industry,
the Business Development Bank of Canada cited that "Among investable
asset classes, venture capital shows one of the highest persistence of
returns, meaning that funds which deliver top quartile returns for one
fund are more likely to deliver top quartile returns on following
funds." As one of Canada’s best performing funds since its inception in
2005 with an A rating from FundGrade, the GrowthWorks Commercialization
Fund is well-positioned to prove that point.
The GrowthWorks Commercialization Fund invests in the most
promising Canadian technology companies that seek to capitalize on major
emerging trends in computer science, health care and environmental
protection. Thanks in part to GrowthWorks’ longevity and track record,
the Fund enjoys tremendous deal flow. That said, the Fund is
exceptionally selective - unique technology is only one part of the
Fund’s investment criteria. In an environment where global competition
is fierce and growth capital is scarce, the Fund’s investment criteria
necessarily includes market readiness, management expertise and the
ability for the Fund’s investment team to contribute to the company’s
success.
This tried-and-true formula has already produced an
impressive number of groundbreaking companies in the Fund portfolio:
Bump Technologies (acquired by Google) is now an integral component of
the millions of touch-screen Android handsets sold every month
worldwide; Sysomos (acquired by Marketwire) impacts the marketing
decisions of Fortune 500 companies on a daily basis; and Paymentus
(acquired by a leading U.S. private equity firm in October 2011) is
revolutionizing how household bill payments are done online. In each
case, the Fund was able to contribute its experience, contacts and
guidance to a company endowed with timely technology and world-class
founders.
We believe the Fund’s success to-date, which has been achieved during a period of relatively difficult markets, is a harbinger for even better future outcomes as market conditions generally improve over time. We look forward to your continuing support as we realize on the full potential of the Fund in the coming years.
The above contains “forward looking statements”, including statements based on management’s current beliefs and assumptions in respect of the plans and prospects of, and results achieved by, portfolio companies, timing of venture portfolio exits, general market conditions and information that was obtained from third parties. Actual results may differ from those implied by such statements or information as a result of numerous known and unknown risks affecting the Fund and current and future portfolio companies, including risks inherent in emerging businesses with unproven products or limited sales, general market and economic conditions, including IPO and M&A market conditions, and other risks referenced in the Fund’s public disclosure record. Many of these risks are beyond the control of the Fund, its manager and the Fund’s portfolio companies. Neither the Fund nor the manager assumes any obligation to update such statements or confirm the accuracy of such information.