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Why Private Capital is Important

Why Private Capital is Important

Private capital is an important contributor to economic development, technological progress, and employment across Canada and the world

Private capital investment provides the expertise and capital to power Canadian companies at every stage of their development.

The private capital industry enhances productivity, increases competition, creates high paying jobs, and is building a stronger and sustainable economy.

CVCA’s venture capital members are building new enterprises from the ground up, pursuing ground-breaking discoveries and developing innovative products, services, and platforms. And our private equity members are the engines of growth for established firms, elevating and entering new markets to expand their businesses.

CVCA is anchored in its mission to help our members fuel the economy of the future by growing the businesses of today.

About Venture Capital

Venture capital (VC) is a form of investment for early-stage, innovative businesses with strong growth potential. Venture capital provides financing and operational expertise for entrepreneurs and startup companies — typically, although not exclusively — in technology-based sectors such as ICT, life sciences, cleantech or agribusiness.

The main difference between private equity and venture capital generally is the age of the company. Private equity will typically invest in a mature company; one which has been in operation for many years, if not decades. Venture capital by contrast will invest in new companies — many, if not most, of which will not yet be making a profit, but which have a disruptive business offering with the potential of very strong growth. Businesses seek venture capital investment for many reasons, be it to grow their manufacturing and sales operations, enhance their product development and/​or expand their business and hire new talent.

[Source: Investopedia]

About Private Equity

Private equity (PE) refers to medium-to-long term financing provided in return for an equity stake in potentially high-growth, unquoted companies. Private equity investments typically support management buyouts and managing buy-ins in mature companies, as opposed to venture capital which provides funding for early-stage and younger companies.

As a model, private equity is a proven driver of sustainable business growth. This is achieved through operational expertise, sound management and, importantly, through the close working relationship between the private equity backer and the company management team.

In contrast with publicly listed companies, which can often have thousands of shareholders, private equity managers work alongside the management team to enhance the running of the business. This governance structure leads to much shorter lines of communication.

[Source: Investopedia]

Private Capital
In Canadian Communities Coast-To-Coast

Policy & Advocacy

As the voice of the venture capital and private equity industry, the CVCA advocates strongly for a policy and regulatory environment conducive to stimulating and supporting the vital innovative investments our members make every day to support the growth of Canada’s economy.

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Private Equity Case Studies

Moving Combat from M to L: Private Equity at Work
Moving Combat from M to L: Private Equity at Work

By 2015, Finucan decided it was time to recapitalize the company he bootstrapped and grew organically from the ground up. He now…

Private equity-backed Weatherhaven is helping communities combat COVID-19
Private equity-backed Weatherhaven is helping communities combat COVID-19

Fulcrum didn’t just come with the funds, Castelli says, but the experience and strategic insight to help Weatherhaven cope with…

OP-ED // Private Equity: The Engine That Fuels Canada’s Growth
OP-ED // Private Equity: The Engine That Fuels Canada’s Growth

I joined the CVCA a year ago with limited knowledge of private capital. I had been exposed to venture investing, to some degree,…