Jim Orlando’s 2016 Venture Capital predictions scorecard

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Betakit | | Jan 4, 2017

jim-orlando-2016-predictions-scorecard

Twelve months have flown by and it is time to look back at my Ten Canadian startup and venture capital predictions for 2016. A lot has happened in our ecosystem since this time last year, so it is interesting for me to look back at what was on my mind a year ago and see how my predictions stacked up.

Prediction #1: Deal Volume Would Increase Disproportionately For Early-Stage Startups

A year ago I thought there would be fewer larger investments in later-stage ventures in 2016 versus the previous year, resulting in proportionately more investments in early-stage ventures. A guesstimate using data from the CVCA shows that funding to early-stage companies increased by 30%, while funding to later-stage companies decreased by 5% (the overall funding during the year increased by 15%). For what it’s worth, the four new investments in 2016 here at OMERS Ventures (AmpMe, Nudge, and two unannounced investments) were all early-stage and pre-revenue.
Outcome: TRUE
Score: 1/1

Prediction #2: U.S. Investor Interest in Canadian Startups Would Increase

I felt that in 2016 U.S. investors would be even more interested in Canadian startups than in previous years, with a particular emphasis in late-stage investments. A review of CVCA data shows that foreign investment in Canadian startups increased by 15% in 2016 over 2015.
Outcome: TRUE
Score: 2/2

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Prediction #3: 2016 Would Not be the Year for Tech IPOs

I wasn’t bullish on the potential for tech IPOs for 2016 and I was right. Stay tuned for 2017
Outcome: TRUE
Score: 3/3

Prediction #4: More VC Firms Would Raise Larger Funds

With the Canadian VC industry continuing to mature, I predicted that some of the established VC firms would raise larger funds (> $150M) in 2016 versus 2015. Georgian ($485M) and iNovia ($175M) announced their funds in 2016. New funds from BDC Cleantech, VanEdge, and Yaletown were announced as well, but they were all just below the $150M threshold. The larger two compare against our one OMERS Ventures Fund 2 announcement ($260M) in 2015. Narrowly got this one!
Outcome: TRUE(ish)
Score: 3.5/4

Prediction #5: Equity Crowdfunding Would Take Hold in Canada

A year ago, I felt that the then-new equity crowdfunding rules would impact early-stage startups in 2016, similar to what has happened around the world. A mid-2016 report from the National Crowdfunding Association of Canada forecast a significant increase in crowdfunding capital for 2016. The numbers are still relatively small compared to the overall venture capital industry but the underlying trend is there.
Outcome: TRUE
Score: 4.5/5

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