Canada's getting another new venture capital fund, but this time the targeted firms will be extremely small startups that need their first or second rounds of cash.
Run by Boris Wertz, the B.C.-based funder who got his big break by selling AbeBooks.com to Amazon in 2008, Version One Ventures is a $15-million micro venture capital fund that will invest between $250,000 and $500,000 in seed and Series A funding rounds across North America. Target firms will be in the consumer internet, e-commerce and mobile spaces.
The fund is backed by such notable Canadians as Jeff Mallet, the former chief operating officer of Yahoo!, Ryan Holmes, the chief executive officer of HootSuite, Markus Frind, the founder of dating site Plenty of Fish, and Patrick Lor, a co-founder of iStockphoto, which was sold to Getty Images.
Mr. Wertz is originally from Germany, but he came to Canada about a decade ago when his startup -- which tracked new, used and rare out-of-print books -- was sold to a Canadian company. After ultimately selling to Amazon, he started some angel investing on his own, and his track record from that experience convinced the other backers to get involved with the new fund.
Surveying the landscape, Mr. Wertz figured that starting a micro VC fund was the best route to take. “If you look at how tech investing environment has evolved in the past decade, the capital requirements of a startup have changed," he said in an interview. Building a website is so easy now, and even obtaining servers has been simplified by Amazon and Google. For that reason, startups need less immediate cash in the early days.
Whereas in the past a VC might have invested $5-to-$10-million in early rounds, you can get away with just $1-million these days. “You can really make a difference with a small fund," he said.
Though the new fund has some prominent Canadian backers, it won't limit investments to companies north of the border. Mr. Wertz noted that in the past, Canadian venture capital funds have tended to invest in only Canada, or on one coast. "It’s a tougher proposition," he said.
“I’m really trying to invest across North America.”