About an hour west of Toronto lies an area that has spawned some of the most successful technology companies in North America: Waterloo region.
As a result, it has become a captive destination for venture capital investment.
The latest milestone in this investment bonanza is a $50 million venture capital fund from Waterloo, On.-based Tech Capital Partners Inc. aimed at giving the region’s tech startups a leg up.
This latest infusion brings the total sum invested by Tech Capital to a whopping $85 million, according to Communitech, an association of 400 technology companies in Waterloo.
Other investors are expected to follow suit, and collective new investments in the region are likely to reach around $200 million, said Iain Klugman, president of Waterloo, On.-based Communitech. “We have a community that is very, very supportive of entrepreneurs. We are really the entrepreneurial capital of Canada.” We are really the entrepreneurial capital of Canada.Iain Klugman>Text He noted that Waterloo’s technology sector has been the fastest growing economic sector in the region.
According to Klugman, there’s no dearth of private equity funds – including venture capital – available to entrepreneurs with a hot idea, who want to set up shop in the Waterloo area.
Part of Communitech’s role, he said, is helping entrepreneurs fine-tune their business plans and understand the funding process – how to access capital and understand what investors want before making a presentation to them.
In addition to drawing more entrepreneurs into the region, Communitech also actively recruits technology professionals. The association’s recruitment strategy is threefold: holding employment events at various Canadian and US locations; an alumni approach that targets new graduates from universities across the Waterloo region; and the “expat strategy” aimed at attracting talented Canadian IT professionals currently working in the US.
The region currently employs 25,000 workers in the technology sector. Toronto, Markham, Mississauga and Ottawa are key sources of IT talent in Canada. In the US, Silicon Valley, Boston and Dallas are the top three centres, said Klugman.
Research in Motion (RIM), which developed and designed the BlackBerry wireless platform, is the most high-profile Waterloo success story. The company’s president and co-CEO Mike Lazaridis founded RIM while a student at the University of Waterloo in 1984.
Open Text, now a successful enterprise collaboration and content management software, began as a project undertaken by a group of students from the University of Waterloo to convert the Oxford English Dictionary into digital format.
What started out as a seven-worker company 13 years ago has grown to an enterprise of 2,100 employees worldwide.
“To do a start up (in Waterloo region), you are going to be cocooned by various support organizations that can provide assistance to help you launch your company,” Klugman said. “We think that [entrepreneurs can] do a better job by starting their companies here [rather] than in Ottawa, Toronto or anywhere else.”
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