A bicycle built for two

The Quebec City Conference (see prior post “The bang of the VC buck” October 21-09) was useful on many levels, but it served as a great catch basin for what I’ll call the “most asked” questions in the start-up and venture capital industry.

One question surrounded the Tandem Expansion Fund: folks are excited about getting it launched. Tandem is the $275-$300 million late stage tech fund that is a cornerstone of the federal government’s action plan to assist Canada’s Innovation Economy. The federal government’s $75 million lead order was announced in the February 2008 federal budget, and the rest of the gov’t-driven ~$300MM LP syndicate was said to have been in place in 2008. A national RFP process to pick the fund manager was completed late last Fall.

Charles Sirois is one of the co-heads, along with merchant banker Brent Belzberg. Our Fund II shared a deal (Airborne Entertainment) with Mr. Sirois, and he’s as popular as they come in Quebec VC circles.

The team’s announcement was made in the Spring. In the release, Tandem is said to fill a “significant void in Canadian venture capital market”. The release also said that Tandem “expects a first close on the Fund of $300 million this summer”. With Fall now upon us, everyone in the industry is anxious to see the fund “close” and that capital start to flow. But the devil is always in the details, even when the fund capital is raised at the outset.

With $90 million of federal money being dedicated to “private venture funds” via a fund-of-fund model, the $75 million in question represents a big chunk of Industry Minister Tony Clement’s commitment to the sector. Everyone in tech land with at least $10 million of trailing revenue should update their powerpoints and outer-year forecasts for when the time comes!

MRM