In 2022, the federal government commissioned a report asking Canada’s VCs what they thought about BDC, the Business Development Bank of Canada.
The report offers a candid evaluation of the Crown corporation and Canada’s largest direct and indirect venture capital investor, but here’s the thing: the report was effectively forgotten, and its recommendations were never actioned. Few people even know it exists!
But BetaKit obtained the report and revealed its contents to the world. Reporter Madison McLauchlan, who broke the story for BetaKit, joins to discuss the report and the questions surrounding it.
“BDC is powerful in the sense that it can make or break a fund… And a lot of people are trying to close funds right now.”
First among them is what Canada’s VCs had to say about BDC, which focuses mostly on more support for emerging managers and less direct competition (think: crowding in capital rather than crowding out). It’s interesting feedback from a group of firms that currently struggle to raise without BDC’s support.
The difficulties BDC faces in effectively balancing its dual responsibilities as venture supporter and venture investor are also unlikely to go away anytime soon, given its plans to spin up new funds and enter new markets like defence. One response in the report suggests that BDC might be suffering from an identity crisis, which might be compounded by the significant turnover in BDC Capital over the last few years.
Perhaps the bank is simply being asked to do too much. Is BDC, which is not exactly producing massive returns, simply too big to change? Would that also mean it’s too big to fail?
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All of this leads to one question I’d personally like answered, which is why the feedback in the report BetaKit obtained wasn’t more widely shared, discussed, and actioned. If you have an answer to that question, we’d like to know.
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Feature image courtesy BDC Capital.