When Calvin McElroy, president and chief executive of Calgary firm Cquay Inc., went in search of venture capital early last summer, the timing could not have been worse.
The bloom was coming off the tech market; share prices were sinking along with investor confidence. By the time McElroy sat down to close a $5.6-million financing with a syndicate led by BDC Venture Capital in December, market conditions had deteriorated even further. Still, not only did Cquay manage to preserve its value during those difficult months as others around it crashed, the small Internet firm found itself in the enviable position of having a number of venture capital firms vying for its business.
“We had the good fortune of being in the market at a time when we had the right attributes : those that I’m not sure others out there looking for money at the same time did,” he says. Cquay, which has created a technology platform for spacial location software, also manages technical data and information over the Web, and is in an industry sector that’s been particularly hard hit by investor backlash. Yet, the small company has had no difficulty generating interest. Further still, it has had no trouble finding venture capital in, of all places, Alberta. Along with BDC Venture Capital, the venture capital arm of the Business Development Bank, other investors included Calgary’s Foundry Ventures Inc. and Network Capital Inc., as well as Starlink Capital Corp., Cavendish Investing Ltd. and Curtis Investment Corp.
Despite industry concerns that Alberta is in desperate need of additional venture capital to prop up its technology and biomedical sectors, overall access to funds has grown in this province, and there is still hope for young firms even in these tough markets, say those who have broken through the financial barriers. “When things were booming, it really was not as good as people thought and when things are contracting, they’re not as bad as people think,” says Gonzalo Naranjo, president and chief executive of Calgary-based Alterna Technologies Group Inc., which closed a $30-million round last September, one of the largest in the province. “It really requires homework but we think there is definitely funding opportunities.”
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