I do not think that there is an angel, VC or business risk-taker in the country who disagrees with Brad’s central point – that the last thing we need is to enter a world where governments sponsor the game and, as sure as night follows day, regulate its flow.

I personally believe that there is such a strong natural alignment between angels & VC’s in creating superior financial returns, that personal networking has long blurred the lines between these two segments.

Stronger or clearer links will not resolve the acute capital shortage which is putting our VC firms at a real disadvantage on the world stage.

In my view, rather than regulate it, I believe that the leaders of our largest pension funds, banks, and governments/unions [with their pension funds], need to push each other to take a risk and apply over 1% of their holdings to the VC asset class. No regulation, but perhaps publish a list of those who do, and those who do not.

Let’s acknowledge that this class has not carried its weight in Canada from a pure ROI perspective, so that those stepping up to the +1% bar are making a bet on our future.

They can place their bets on winners, as the VC’s that remain and who have survived have delivered good returns with plenty of obstacles, and deserve the backing of the leaders who control the purse strings.

Doing nothing, or waiting for a regulatory committee is not an option. Governments control a lever of taxes … rather than have them give money directly to VCs, would it not be better for them to implement direct tax incentives, which makes the asset class more attractive. I repeat, make the financial return on invested capital model more attractive for this class with the world’s more attractive tax holidays, and do it quickly.

If anyone in the government is reading this, do not bother increasing your big SRED program … it is so dated and slow that it needs an overhaul before it needs monetary changes.

From the startup trenches,

Shaun MacDonald
Mashup Arts Inc