Former Canadian Venture Capital and Private Equity Association (CVCA) chair and Lumira Ventures managing partner Peter van der Velden has publicly criticized CEO Kim Furlong for her handling of a recent meeting with international limited partners (LPs) in London, UK.
In a September 20 LinkedIn post, van der Velden alleged that “the meeting was a bit of a miss because the CEO of the CVCA appeared unwilling or unable to advocate for the largest part of its membership.”
Van der Velden lodged three specific complaints. He claimed Furlong: failed to adequately highlight the Canadian venture capital (VC) story; spent too much time providing a broad Canadian economic update; and indicated that Canadian pension funds are not backing more domestic VCs because they focus solely on performance, when he believes other factors are at play. BetaKit has not independently verified van der Velden’s account of what transpired at the meeting.
“This event had 1 purpose, build engagement & attract foreign capital to CDN VC GPs & companies, & the CVCA CEO just threw the entire sector under the bus.”
According to van der Velden, the meeting was organized by the Global Affairs Canada liaison to the CVCA, hosted by former Canadian Member of Parliament Ralph Goodale at Canada House, and about encouraging foreign investors to participate in Canadian VC as co-investors or LPs, connecting this group with Canadian general partners (GPs). “This event had 1 purpose, build engagement & attract foreign capital to CDN VC GPs & companies, & the CVCA CEO just threw the entire sector under the bus,” he alleged.
Throughout the LinkedIn post, van der Velden did not refer to Furlong by name, only “the CVCA CEO.” When reached by phone regarding his post, van der Velden told BetaKit that he had nothing more to add.
BetaKit reached out to Furlong and the CVCA for a comment in response to van der Velden’s post. Furlong did not respond by publication time, while a spokesperson for the CVCA asserted in a statement that it “remains dedicated to fostering constructive stakeholder engagement on access to capital and championing Canada as an attractive destination for investment.”
In its statement, the CVCA did not respond directly to van der Velden’s comments, instead offering a more general reply: “The CVCA provides numerous opportunities for members to share candid feedback, at the board level, in committees, through surveys, and in one-on-one discussions. CVCA takes pride in representing the interests of all our members—the investors behind the creation of thousands of jobs, the advancement of innovative technologies, and the strengthening of local economies across the country.”
“Across industries, a diversity of perspectives is expected, especially on issues that are vital not just to the success of our sector, but to the future of Canada as a whole,” reads the statement. “The CVCA remains dedicated to fostering constructive stakeholder engagement on access to capital and championing Canada as an attractive destination for investment.”
Van der Velden is the founder and managing partner of Lumira Ventures, a Toronto-based healthcare and life sciences VC firm that is currently working on the launch of its next fund. He held senior roles with the CVCA between 2008 and 2016, including serving as president and chair in 2012 and between 2014 and 2016.
According to van der Velden, Furlong should have done a better job of selling Canada’s VC industry at the meeting by outlining its “growth, VC-backed success stories, strong financial performance, how GPs have thrived despite the lack of domestic [pension plan] engagement, and why GPs like those in the room are tougher & more resilient because of it.”
Canada is home to some of the largest pension funds in the world, but they have among the smallest domestic allocations globally, according to FDI Intelligence.
Canada’s eight largest pension funds, sometimes referred to as the Maple 8, include the Canada Pension Plan Investment Board, Caisse de dépôt et placement du Québec (CDPQ), Ontario Teachers’ Pension Plan, Alberta Investment Management Corporation, Public Sector Pension Investment Board (PSP Investments), the Ontario Municipal Employees Retirement System (OMERS), and Healthcare of Ontario Pension Plan.
Recently, there has been strong debate over whether the Government of Canada should force them to invest more in Canada. Supporters of this idea have argued that it could help address Canada’s productivity woes and ensure greater access to capital for domestic businesses, while detractors—including the pension funds themselves—say introducing local investment rules would compromise their mandates to provide secure retirement income for Canadians.
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According to van der Velden, in response to a question from a UK family office about why, while Canada’s largest pension funds are investing heavily on a global basis, top Canadian VCs have been forced to fundraise abroad, Furlong said, “The reason for the lack of engagement is because the Maple 8’s sole objective is performance.”
Van der Velden took issue with this response, which he claimed does not convey the whole story, including that save for OMERS and CDPQ, Canada’s big pension funds have largely been disengaged from the VC since the mid-2000s when they became “quasi [private equity] firms,” that they have consistently articulated to foreign and domestic GPs that the cheque sizes in Canadian VC are too small, and that they have failed to build teams with the experience necessary to truly engage the industry.
In a reply to van der Velden’s LinkedIn post, Impression Ventures founder and managing partner Christian Lassonde noted that his firm left the CVCA years ago, adding, “it’s not clear to us who exactly they are advocating for anymore.”
“As a trade association for VC/PE members, the CVCA’s fundamental role is to advocate for the CDN VC/PE sector and this means having a CEO who is passionate, high conviction and unfailingly willing to promote our sector to LPs everywhere by delivering the message that the CDN VC asset class can & should be accretive to their overall performance,” reads van der Velden’s post.
“If the CEO won’t do that for the majority of members then that is a problem.”