The Canadian Venture Capital and Private Equity Association (CVCA) has made “chronic underfunding” of the industry its top priority following disappointing third quarter (Q3) data for Canadian venture capital (VC) investment and fund raising. Q3-05 data provided by Thomson Macdonald (formerly Macdonald & Associates Ltd) show VC investments fell to $261 million, down 59% from the Q2 total of $635 million. The VC industry has now invested $1.23 billion in the first three quarters, down 10% from the comparable period in 2004. The decline is attributed to a focus on smaller transactions (Q3 average of $1.6 million) and the absence of US and foreign funds which tends to invest in larger transactions. The CVCA says it has a number of initiatives underway to address undercapitalization of the industry….