Wednesday, 21 March 2012

Canada’s U.S. tech-investment outpost expands

Canada’s U.S. tech-investment outpost expands

Mar 21, 2012 – 7:43 AM ET | Last Updated: Mar 21, 2012 3:58 PM ET
At first glance, the office park located at 3000 Sand Hill Road in the Silicon Valley city of Menlo Park, California might look more like a posh summer camp cottage retreat than the epicentre of the venture capital universe.

Located inside the various nondescript buildings scattered throughout the exotic plants and trees are the offices of some of the most powerful venture capitalists in the technology industry. Billions of dollars of potential funding are concentrated here, where power brokers decide which promising startups will receive the cash infusions that could help turn them into the next Google Inc. or Facebook Inc.
Until recently, Kevin Talbot was only a visitor here — albeit a regular one — racking up frequent flyer miles traveling back and forth from his Toronto office.
But as of last August, the Canadian co-managing partner of ATP Capital, the firm which oversees the $150-million BlackBerry Partners Fund, has called Silicon Valley home and is now hoping his new office will further his quest to connect the funds from his mostly Canadian investors with the hottest mobile companies in the world.
As part of that evolution, on Wednesday, ATP Capital — which was formed when JLA Ventures merged with Clairmont Capital (formerly RBC Venture Partners) — will begin a new life as a Silicon Valley venture capital firm, re-branding itself as Relay Ventures, while at the same time announcing a second $150-million BlackBerry Partners Fund.
The new fund — known as BlackBerry Partners Fund II — features Toronto’s Northleaf Capital Partners as lead investor, with Corus Entertainment, Thomson Reuters and of course, BlackBerry maker Research In Motion Ltd. signing on as limited partners.
“Until you actually become immersed in this community, and until you can actually be super responsive, you can’t really build a big business,” said Mr. Talbot, who will assume the role of co-managing partner in Relay Ventures, in an interview. “As a Canadian flying to the Valley every month, we could be niche players, but as a Canadian manager with an office in the Valley, we can turn on a dime and support the companies we have here, and support the Canadian companies as they do business here, and that’s what this is all about.”
Since its launch in 2008, the BlackBerry Partners Fund has invested in 32 companies, six of which have been acquired by larger firms. Although the fund bears the BlackBerry brand, it is not focused on companies that develop platforms for RIM’s famous smartphone, but rather on startups and later stage companies with a focus on mobile computing.
Relay Ventures has already made investments in three mobile-focused companies: Toronto-based ClearFit; Mountain View, California’s Appcelerator Inc.; and San Francisco’s PubNub.
Although some critics might see the decision to operate under the Relay Ventures banner rather than the BlackBerry Partners Fund as a knock against Canada’s largest technology company. But that’s simply not the case, Mr. Talbot said.
“We have not taken the BlackBerry name off the fund,” Mr. Talbot said.
“BlackBerry is still the name of the fund. It’s the master brand that we’ve changed. I have four different business cards and I have four different e-mail inboxes, so really what the Relay Ventures name is supposed to do is turn that into one.”
Although Relay Ventures will maintain an office in Toronto in addition to its Silicon Valley beachhead, the firm doesn’t intend to have a specific Canadian-focused investment focus.
“The reality for Canadian companies is they have to be globally competitive from day one,” Mr. Talbot said. “You can’t be the Canadian YouTube or the Canadian Google; you can’t build a company based on a niche in your geography … The problem is that you have to invest in the best global companies, and if they’re based in Canada, then that’s great. We have to generate a return on investment for our limited partners, and the only way to do that is to find the best companies wherever they happen to be.”

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