According to CVCA (Canada’s Venture Capital & Private Equity Association) statistical report, Canada’s venture capital market has shown a decline on both annual and quarterly parameters. The research was conducted in partnership with Thomson Reuters.

The report states that the factors responsible for the decline were comparatively smaller deal sizes and reduced cross-border activity. For the first quarter period of 2007, the total investment was $610 million. However, for the first quarter of 2008 the total amount invested across the country has come down to $323 million. This indicates a drop of 47% against the 2007 first quarter investment figures. Still, the companies receiving venture funding almost remained the same, with 128 companies receiving such funding in the first quarter of 2008. In 2007, this figure was of 131 companies received venture capital funding.

Large venture capital deals were not seen in the first quarter, as the only biggest funding amounted to just $28.8 million. This led to a decline in the average financing size, which as of now stands at $2.5 million as against the figure of Q1 2007, which was $4.7 million.

As Rick Nathan (President, CVCA) said, “These quarterly investment numbers point to the pressing need to strengthen the Canadian venture capital industry. New sources of risk capital are required if we are to develop a stable supply of venture capital funding for the entrepreneurs and high growth companies that are critical to Canada’s future economic prosperity."

North American Context:

In the United States, only a marginal decline was noted in the venture capital funding. Same as last year, about US $7.1 billion were invested in 922 companies. However, the sharp decline in Canada, led to a drop in the rankings of major Canadian provinces relative to U.S. states. After the Q1 2008 results, the provincial rankings among 60 Canadian and American states are as follows:

1. Ontario ranked at 10^th.

2. Quebec ranked at 15^th

3. Alberta ranked at 20^th

Canadian Venture Capital Trends by Investor Type:

The limited presence of American and other international venture capital funds led to the decline that showed in the Q1 2008 results. In all, only $76 million were invested by American firms into Canadian companies, as against the massive investment of $303 million in 2007. For Q1 2008, only 23% foreign investment was recorded in Canada. However, the domestic private-independent funds kept the wagon moving. In all, Canadian domestic investments accounted to $82 million. However, it was still 15% less than what was last year. For 2007, domestic venture funding amounted to $97 million.

Canadian Venture Capital Trends by Region :

On an annual basis, Ontario leads the way in the least venture capital activity for Q1 2008. There was just $130 million invested in 41 companies for the first quarter as compared to an investment of $310 million for Q1 2007. It showed a 60% decline in the venture capital funding for the region.

Quebec received a funding of just $86 million in 41 companies for the first quarter as compared to $171 million for the same period in 2007. It managed to get only 27% of all disbursements.

For Q1 2008, British Columbia, recorded a venture capital investment of just $39 million invested in 15 companies. On the other hand for Q1 2007, it had received $63 million.

Alberta on the other hand faired better for Q1 2008, with an investment of $46 million compared to $18 million for Q1 2007.

Canadian Venture Capital Trends by Sector :

Among all sector categories, clean tech activity was the one that experienced annual growth in terms of venture investment. For Q1 2008, a total of $56 million were invested in 9 companies, which is an increase of 45% as compared to the 2007 Q1 investment of $39 million. IT sector also witnessed an increase in venture investment with $164 million invested in 62 companies.

Trends in Canadian Venture Capital Fund-Raising :

For Q1 2008, new commitments towards Canadian venture capital funds continued to show a decline. In 2007, $467 million were raised as venture capital for the first quarter. However, this year it slumped to $334 million, which depicts a decrease of 28%.

Quebec based businesses saw the bulk of venture capital investment. For 2008 Q1, it raised a total of $196 million, which accounted to 59% of commitments all throughout Canada.

Chicago based private equity firm Ascent Equity Capital has declared that with increased commitment from investors; it has raised its first fund to $5 million. This private equity firm was launched in November 2003 with only $500,000 as its capital. Over time, Ascent Equity Capital I, L.P has generated over a 50% gross internal rate of return till date on the companies and a 2.9x multiple of invested capital.

Through Ascent’s CEO in Residence program, Ascent Equity Capital I, L.P always focuses on investment. Its modus operandi has always been to first associate itself with a worthy CEO (Chief Executive Officer) and then initiates investment in an effort towards a buyout of the company. Then the CEO assumes the top-position in the company. Typically, Ascent also ropes in larger private equity groups to finance the majority of equity in any transaction. In recent years, Ascent has also co-invested with private equity firms such as Frontenac Company in Chicago and Great Hill Partners in Boston in buyouts worth $100 million.

Ascent’s current investments include Central Security Group, a provider of alarm monitoring services, TrialGraphix, a provider of trial litigation services, Encore Legal Solutions, information management services provider to legal firms and legal departments of Fortune 1000 companies and Main Street National Bank, that is a small business equipment leasing and banking company.

Chad Mollman (Ascent General Partner) stated that in the future even if there is an increase in the size of a later second fund, that might amount to $10 million or more, still Ascent will focus on the same size of deals as it has now. This would prevent the increase in problems that other private equity firms have faced, when these firms have intended to increase their size and funds but could not achieve much success in cases of larger transactions.

Last year, Ascent announced that it planned on changing its name from Pinnacle Equity Capital to Ascent Equity Capital. This move had been aimed towards the creation of a separate identity from the CEO search firm Pinnacle CEO Recruiters.

About Ascent Equity Capital:

Ascent is a Chicago-based private equity fund focused on partnering with outstanding CEOs and acquiring and building leading companies. Ascent makes all of its investments through its CEO in Residence program, which involves Ascent partnering with a proven CEO first, and then working with a CEO to acquire an attractive company. Ascent looks to invest in companies with recurring revenue, high margin business models that can be built into leaders in their industries.

Ascent Equity Capital’s investment strategy is to invest in transactions where:

1. A private company is under-managed or “under the radar”.

2. A new management is able to improve the operational performance and implement a successful growth plan.

3. After a company has achieved critical mass and demonstrated strong growth and margins it is attractive to a number of large corporate buyers and larger private equity groups.

Ascent Equity Capital makes equity investments of up to $2 million, and brings in larger private equity firms to partner with acquisitions of companies up to $1 billion in enterprise value. In the past Ascent has partnered with private equity groups such as Great Hill Partners in Boston, and Frontenac Company in Chicago on management buyouts of companies with enterprise values as high as $100 million.

Ascent is actively seeking investments in companies in the business-to-business services, consumer services and products, financial services, and media and publishing sectors.

According to an announcement made at Menlo Park California,. Facebook Inc. that is a leading social utility has acquired a $100 million in debt finance from TriplePoint Capital. Last fall, Microsoft and other investors had provided $300 million dollars in equity funding to Facebook. TriplePoint Capital is a leading technology and life sciences specialty finance company. The announcement was made at Menlo Park California.

According to Jim Labe (CEO, TriplePoint Capital), “TriplePoint Capital is pleased to continue our role as a major financing partner and supporter of Facebook – a role that began during the Facebook’s pioneering stages. We’ve enjoyed watching Facebook’s success over the years, and look forward to deepening our partnership with them as they continue to mature and their needs continue to evolve."

Previously, TriplePoint had already pumped in $30 million of debt finance into Facebook before this new $100 million investment. TriplePoint Capital has provided debt finances to numerous companies in the fields of technology, life sciences, and clean technology ("cleantech" categories) that has enabled these companies to grow and succeed. These companies are YouTube, Adify, Slide, Coskata, Ilypsa Pharmaceuticals, and numerous others. Due to TriplePoint Capital’s permanent balance sheet, creativity, and dedicated customer service, it has always managed to forge long term partnerships with its customers. The new high-developing companies are provided with a wide-range of financial services and expertise by TriplePoint Capital to help them in every stage of their development.

About Facebook:

Facebook was founded by Mark Zuckerberg in February 2004 and its headquarters are located in Palo Alto, California. It is one of the leading social networking websites that aims at the spread of information through the means of social networks. The website has a user base of 70 million and covers over 47, 000 geographic locations. It covers just about every geographic, work-related, collegiate and high school networks. According to ComScore’s MediaMetrix report, Facebook ranks sixth, among the top ten most trafficked websites in the United States.

About TriplePoint Capital:

TriplePoint Capital is a leading global specialty finance company, headquartered on Sand Hill Road in Menlo Park, California. Its main profile is to work with high-growth private equity and venture capital backed companies with debt financing, equity capital and complementary services. TriplePoint Capital’s unique creativity, flexibility and customer service has been able to get it customers such as YouTube, Adify, Slide, Coskata, Ilypsa, and numerous other high profile technology and life sciences companies. TriplePoint Capital has been rated as a qualified company capable of meeting the needs of high-growth companies at every stage of their development.

Parature is one of the leading Customer Service and Support Software service providers in the field of Information & Technology. It has been recently announced that the company via a Series B round has been able to acquire $16 million in venture capital financing. Some of the biggest investors in the field of IT such as Paolo Alto, California based Accel Partners, Menlo Park and California based Sierra Ventures, high profile investors such as Ching-Ho Fung and Richard Wong were also present at the Series B round.

According to Parature, the funding obtained would be diverted to Parature’s company growth including, expansions of sales distributions, increased marketing efforts and a great deal of emphasis would be given to product innovation and business development.

Parature CEO (Chief Executive Officer) and President Duke Chung said, “As the global leader in on-demand customer service software, we are excited to announce this latest round of funding, marking a great milestone for our organization. Parature serves a vast market and is the fastest growing customer service and support company in North America, with a clear vision for the future of online customer service and support software. Parature is a tremendous success story with over 650 customers, ten million end-users and growing. This relationship with our new and existing partners will enable us to continue setting the standard for support teams worldwide, providing the smartest, most efficient way for organizations to support their customers.” Some of the most prominent names that make the customer base of Parature are Linden Lab, Trulia, Coremetrics, K2 Network, T-Mobile, Office Depot among many others. Parature customer count as of now is 650 and growing.

Parature’s work help companies enhance their customer support, through a series of Software-as-a-Service (SaaS) intuitive designs. This enables its clients to serve, support, engage with and retain customers with a higher degree of efficiency. According to Richard Wong (Partner, Accel Partners), “Parature had the foresight and vision to see the potential of the Software-as-a-Service (SaaS) model from the genesis of the company, and has clearly demonstrated its leadership in the on-demand customer service software market. Our due diligence revealed an organization that has an impressive track record, and accelerating momentum in the industry, which drove our interest to invest.”

After the successful Series B round, Parature CEO Duke Chung said, “Accel Partners has an impressive list of successful portfolio companies such as Facebook, Real Networks, Macromedia, Portal Software, UUNet, Veritas, MetroPCS and Riverbed, and has a reputation for making excellent investments, including many of Parature’s own customers. We’re proud to have attracted another top tier venture capital firm.”

Accel Partners:

Accel Partners was founded in 1983 and since then it has logged remarkable success in the venture capital business. Companies with Accel portfolios have been able to generate over $150 billion in market capitalization. Some of the big names with Accel’s portfolios are Admob, Actuate, Agile Software, Alfresco, AMCC, Arrowpoint, ComScore, Facebook, Foundry Networks, GlamMedia, Infinera, JBoss, Kayak, Macromedia, metroPCS, Polycom/PictureTel, QlikTech, Real Networks, Redback Networks, Riverbed, UUNet, Veritas, Walmart.com, XenSource and Zimbra.

Sierra Ventures:

Sierra Ventures was created in 1982 as a private venture capital firm, whose main goal was to invest in Information & Technology related companies. In partnership with 9 other venture capital firms, Sierra Ventures has currently over $1.5 billion worth of capital invested in the market. Companies with Sierra Ventures portfolios include Active Software (acquired by WebMethods), AmeriGroup, Centex (acquired by WorldCom), ConvergeNet (acquired by Dell), FatBrain (acquired by Barnes & Noble), FrontBridge (acquired by Microsoft), Healtheon (merged with WebMD), Interact Commerce (acquired by Sage), Intuit, Micromuse, On Assignment, OnLink (acquired by Siebel), Quinta (acquired by Seagate), StrataCom (acquired by Cisco), and many others.

Valhalla Partners:

Based in Vienna, Virginia, Valhalla Partners act as an advisor to entrepreneurs who wish to establish IT companies of global standards. As of now Valhalla Partners have invested in more than 120 companies and till now have been able to get about $1.5 billion as Return on Investments (ROI). Companies such as Advertising.com, BDMetrics, CareerBuilder.com, Clarify, EnterpriseDB, Epicor, Exchange Solutions, JumpTap, LeftHand Networks, Mobius, NextLink, Nirvanix, Progress Software, Proxicom, RealOps, Register.com, Riverbed Technologies, SafeNet, SEPATON, ServiceBench, Trilogy, and webMethods have all been heavily invested in by Valhalla Partners.

Parature Inc:

Parature Inc was founded in 2000 with is headquarters located in Vienna, Virginia. Its services are dedicated towards on-demand customer service software, thus providing businesses with opportunities towards improving their customer service with the help of the Internet. Parature received the 2007 Product of the Year Award from Customer Interaction Solutions magazine. Its name also features in the Inc. 5000 Fastest Growing Private Companies in America.

In an effort to improve the education standards in the United States and to bring these standards to international levels, the National Venture Capital Association (NVCA) in collaboration with NewSchools Venture Funds have decided to create a multi-million dollar philanthropic venture fund. Primarily, the start-up organizations would be the ones benefiting the most from this K-12 Infrastructure Fund. These two associations will be investing in those start-up organizations that have aimed towards building high-performance public schools. These small organizations are planning to achieve their goals by developing innovative human capital solutions and performance tools. This massive project was unveiled in front of 700 eager venture capitalists at the NCVA Annual Meeting In Santa Clara, California.

According to Mark Heesen, “The K-12 Education Infrastructure Fund offers a meaningful way in which the venture capital community can engage in the critical process of improving education in our country in a manner that is highly relevant to our business. We are very enthusiastic about partnering with NewSchools, an organization that has a proven track record of identifying and investing in education entrepreneurs who can make a real difference. We believe the NVCA membership will bring their strong ideals and commitment to success to this exciting project."

This new opportunity broadens the horizon of venture capital as the NVCA members can now invest funds in this project on an individual basis as well as on behalf of their firms. These members will also have the opportunity to guide the new upcoming companies in which the proposed Fund would be invested.

The NVCA/NewSchools will have a seat on the board of directors in each and every firm that they would invest in. The goal is to work with invested company’s management to formulate a high-quality and sustainable enterprise that would be capable of providing a positive effect on students’ results in areas where the education rate has become a matter of grave concern.

Some of these funding would be targeted specifically towards new recruitment training programs for teachers and principals, assessment and data systems to guide instructions and inform parents and open source solutions for curriculum and assessments.

NewSchools has been managing three funds for the last 10 years amounting to a total of $125 million as of now. These funds have been appropriately used to help 40 high-performing organizations. Some of these organizations are Teach for America, New Leaders for New Schools and Revolution Foods. Apart from the above mentioned organizations, there are also 16 charter school management organizations that are designated to operate 300 schools and serve more than 100,000 children.

As Ted Mitchell (CEO, NewSchools) said, “Entrepreneurs backed by NewSchools are proving that all children can meet high standards if given the right tools and the right environment. We are thrilled to partner with NVCA, which has been a hub of entrepreneurship and entrepreneurial activity across the economic spectrum."

In 2006, the NVCA MAGNET USA program was announced that was designed to promote U.S competitiveness via enhancements in the fields of education, immigration, research & development and the capital market. This newly formed alliance between the National Venture Capital Association and the NewSchools Venture Fund aims to advance the goals of the NVCA MAGNET USA.

About NVCA:

Approximately, 480 venture capital and private equity firms make up The National Venture Capital Association. Its primary goal is to nurture the importance of venture capital in the American economy and support entrepreneurial activities and innovations. In 2007, according to a study conducted by the Global Insight, all those companies that were invested in by venture capitalists accounted for 10.4 million jobs and $2.3 trillion in revenues in the United States. Further details and information on NVCA is available at www.nvca.org.

About NewSchools Venture Fund:

NewSchools Venture Fund is a national non-profit venture philanthropic firm. Since 1998, its main goal has been to transform the public education system for underprivileged children by supporting education entrepreneurs that create non-profit and for-profit educational institutions. At present, its focus is on the supply of high-quality public schools for the underprivileged children, enabling conventional and charter school systems so as to make these organizations performance driven and improve the number of talented people into and across the public school system. Sub-urban communities such as New York City, Chicago, Washington, D.C., New Orleans, Los Angeles, and Oakland, California are on the priority list of the NewSchools Venture Fund, where it hope to bring about a significant systemic change. For more details on NewSchools Venture Fund, visit www.newschools.org.

William Randolph Hearst III, Adobe Ventures and other investors have agreed to a $4 million venture capital funding for FORA.tv. According to Beet.TV , FORA.tv that is an online distributor of intellectual videos has been able to close this venture capital funding via a Series A round. Its online videos include numerous public speeches and delivers highly intellectual content through partnerships with Aspen Institute, the Commonwealth Club, the Council on Foreign Relations and many more prestigious institutions.

In October 2007, FORA.tv had been able to close a $2 million venture capital funding deal from interested investors such as William Hearst and Adobe. FORA.tv is a San Francisco based company that specializes in display of online video content from highly respectable think tanks, universities and well-known speakers. These videos are assorted categorically and are easily available as they are arranged topic wise. The site also offers tools for personalization for user choices. As William Randolph Hearst III, who is a private investor said, "FORA’s financing is a vote of confidence for the company. It will make it possible to aggregate much more public commentary from all points of the spectrum. FORA’s new 2.0 release software adds features that let sponsors add their own searchable content to the video archive. It’s very cool."

According to FORA.tv CEO (Chief Executive Officer) Brian Guber, the capital received from the venture capital funding would be diverted towards the expansion of website’s content and audience variables. As of now FORA’s website traffic statistics cannot be downgraded nor can they be termed as highly impressive. However, the growing popularity of the site and the fact that most of its audience is from the intellectual community, compels major companies to get in sponsorship contracts with FORA.tv, in an effort to enhance their visibility. At present, FORA’s sponsors include Pfizer and Chevron.

Some of the current big names in the intellectual online video distribution market are TED Talks, BigThink which is a recent addition to this community is still showing a lot of prospect for growth.

However, with the acquisition of such an impressive funding, all eyes for the time being are on FORA.tv and everyone is anxious to see what new additions does FORA make to its website and to its content.

Asset Allocation is defined as techniques, an investor uses to distribute his investments among various other investment options such stocks, bonds, mutual funds, investment partnerships etc. Asset allocation differs from person to person depending upon their ability to take risk and their monetary requirements. Practicing diverse asset allocation models can lessen the risk of losing your money, as each asset class has a different inter-relation with other assets. An asset allocation model determines the total amount of money an investor puts into each asset class. The sole purpose of these models is to establish an investor’s personal goals and risk tolerance levels.

Types of Asset Allocation Models:

1. Preservation of Capital: Such kind of asset allocation models which are focused on preservation of capital are generally created for low risk investors. These investors are the ones who do not wish to take any sort of risk and invest for a maximum of 12 months only. Even a small amount of capital loss is unacceptable to them. They invest with short term goals in mind such as college education or property purchase. Monetary instruments such as cash, treasuries, commercial papers are the tools that compose over 80% of portfolios for this asset allocation model. The downside to such investments is that many a times, the returns gained are not sufficient for purchasing capabilities due to the ups and downs that constantly plague the markets.

2. Income: This asset allocation model’s portfolios are designed specifically to generate income for the investors. The instruments used in this model are primarily fixed-income obligations such as Real Estate Investment Trusts or REIT, treasury notes and often blue-chip company shares. These are the companies that have stable market earnings and almost no liabilities. Retirees are some of the most prominent investors in this allocation model.

3. Balanced: Between the ‘preservation of capital’ and ‘income’ portfolios, lies the Balanced portfolio. This is considered to be one of the safest allocation models as it strikes a balance between long-term growth and current income. This model results in varied assets that generate cash and work as a low risk long term investment option at the same time. The tool of a balanced portfolio is largely considered to be medium-term investment, that comes with fixed income obligations and shares of leading corporations, from whom there are more chances of getting a cash dividend. In a balanced portfolio, a very less amount of capital is invested in the form of ‘cash’ or ‘cash equivalents’.

4. Growth: This asset allocation model is targeted at investors who are looking to build long-term wealth. Only those investors who aren’t in the need of immediate cash returns invest in growth portfolios. Infact, the investors are likely to raise their investments by submitting additional funds each year. In the growth portfolio, portfolio managers often tend to introduce foreign companies, so to expose their investors to international economies provide them with multiple opportunities as well.

Asset Allocation changes with the speed of the markets and the tides of time. Investors who are active participants in the Asset Allocation strategies, often tend to observe that their requirements in life change as they progress through time. Keeping this factor into consideration, many portfolio managers recommend investors to switch some portion of their investments to other models, to keep themselves secured and financially competent for a tuning point in their lives.