Editorial - 16-5

Quebec has once again taken the bull by the horns in its ongoing campaign to stimulate the province’s technology sectors. This time the province is combating its woeful record for attracting foreign venture capital (VC). Never one to let an opportunity slip by for using a new fiscal stimulus, it is providing $100 million in loan financing to biotechnology firms that can secure a substantial amount of foreign VC financing (see page 4).

New data show that Quebec firms lag far behind the rest of Canada in their ability to secure foreign VC. In the VC business, perception is everything. US VC (and to a lesser extent the rest of Canada) is seemingly ignorant of the rich vein of investment opportunities to be found in Quebec. The new fund should provide a powerful fiscal stimulus for firms to move their message beyond their own borders.

Other activities are aimed at achieving the same objective. The Go-North 2002 conference in Montreal last month was designed to get US VC talking to promising mid-stage biotech and information technology firms. It’s too soon to say whether the event was successful, but it’s refreshing to see Americans exposed to the modern face of Quebec and Canada.

Many contend that willful ignorance is the leading cause for the under-representation of US VC in Quebec. A quick glance at recent knowledge tests of Americans confirms such a view. It’s up to Quebec firms to penetrate the centre-of-the-universe mentality that’s so pervasive south of the border. Once properly re-focused, US VC can be a powerful tool for growing some of Canada’s most promising young firms.