European Venture Capital is thriving
Deal Terms -
Dividend Rights - preferential cumulative dividends. Company will not be allowed to pay dividends to other shares.
An important element of the payback to
VCs have participation rights except in legal jurisdictions which prohibit it.
Dividend rights may increase annually, which may be a clumsy way of forcing an early exit.
in the UK, dividends only payable out of distributable profits. No so elsewhere.
prohibition on on giving financial assistance for the acquisition of its own shares
mostly affects debt financing as it prevents the giving of security an guarantees
financial assistance does not have to be given to the person providing the financing
Can "whitewash", but he directors must be confident that the company will survive for 12 months
Richard Corley, A Canadian VC Market and Deal Terms
Canadian VC market - info CVCA
CA GDP 10% of US Market.
$1.8B CDN invested last year
Investments concentrated in Ontario - 50%, rest Quebec, British Columbia
Canadians experienced a minibubble 99,00
Somewhat preponderance of telecom investments in CA.
Trends in investment track US, capital raising trends tend to lag US slightly.
Individuals currently account for 70% of capital raised by VC funds in Canada
Growing internationalization of CA venture investing.
Canadian experience is general consistent with East Coast experience
Canadian venture investors are more likely to request upfront fees, tranching of investments, and valuation ratchets