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Real Ventures thinks the time is right to give more emerging entrepreneurs a shot at success. They now have the cash do it: The Montreal-based early-stage venture capital investors have just closed the first half of what's expected to be a new $100-million fund.
Teralys Capital, backed by Caisse de dépôt et placement du Québec, is injecting half of the $50-million that's ready to invest. Fier Partners, the federal government (via its $400-million Venture Capital Action Plan announced in January 2013), Real's founders and a number of undisclosed angel investors round out the other contributors.
Real's portfolio is already quite diverse, ranging from discount brand retailer Beyond the Rack to video sharing app creators Cinemagram. While partner John Stokes is keen to see its existing stable flourish, he's ready to bring other founders on board who are pushing the boundaries of innovation. To that end, 95 per cent of the new money will go towards new companies beyond Real's 55-firm stable.
"As the Internet becomes more pervasive and touches more industries and creates new opportunities for disruption, the diversity of our portfolio increases," Mr. Stokes said in an interview.
"We believe there are some amazing entrepreneurs and they deserve a chance to build great companies. We're willing to invest very early in them."
Real, a six-year-old venture capital firm, comes in at the initial (or "seed") funding round, so it has a hand in shaping companies. There's an opportunity because early-stage entrepreneurs in Canada are, for the most part, neglected by investors. "We want to invest in a rising tide," Mr. Stokes says.
What he calls the "democratization of entrepreneurship"– more founders starting companies with less money – over the last half-decade is helping to align his cause with macro changes in technology. This is happening especially fast in Montreal, whose start-up scene is still in its early stages and that makes Mr. Stokes bullish. " I think the Montreal start-up scene is as vibrant as any city in North America," he says.
Mr. Stokes expects to announce the new fund's second tranche, part of which is still being raised, in a few weeks and a third, if needed to reach the $100-million target, later in the year.