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Toronto-based Wellington Financial is proving you can raise venture capital money in Canada, but that does not mean it will be invested here.
The firm this week announced a first closing on its new Fund IV, with $177.5-million from Canadian institutions, pension funds and wealthy families. Where will the money go?
If history and Wellington's plans are any guide, south. Wellington plans to open its second office in California, and points out that 20 of its last 25 investments have been with companies in the U.S.
Some of the most successful firms in the Canadian venture space are those that are looking on both sides of the border for investments.
Wellington has found a niche lending to venture-backed companies. Its last fund, Find III, had $150-million of cash. That was used for 52 loans that totalled $300-million of financings during the fund's run.