Two former Newbridge Networks Corp. executives have founded a new Ottawa-based venture capital firm with strong ties to deep pockets in Silicon Valley, a new source of startup cash that could help ease the Canadian technology industry's recent capital crunch.
Conrad Lewis and Ken Wigglesworth say their new company, called Eagle One Ventures Corp., will have access to about $500-million in venture capital and will focus on telecommunications equipment startups. The pair estimates that at least 20 per cent of that - or at least $100-million - will be invested in Canadian technology companies.
"It's a tremendous endorsement of Canada," said Mr. Lewis, a former Newbridge vice-president.
Eagle One, which will be officially unveiled Tuesday, will be looking across Canada for investment opportunities but will focus particularly on Ottawa's technology sector. The new company will work closely with and represent California-based Newbury Ventures, a nine-year-old venture capital firm that has invested in more than 100 tech firms.
A self-described "mentor capital" firm, Eagle One aims to provide advice as well as money. "Access to deep pockets means we're going to be there for the long term," said Mr. Wigglesworth, Newbridge's former chief financial officer.
Eagle One partners say the depressed market for technology stocks makes it an excellent time to be investing in startups because valuations are more favourable.
Mary Macdonald, president of Toronto research firm Macdonald & Associates Ltd., said the new company will provide some startups with a financial boost at a time when many smaller companies could use the help.
"For a private fund, it's a good, healthy starting point."