The MBET Experience

The University of Waterloo – Master of Business, Entrepreneurship and Technology Program

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Investment Industry Association of Canada

March 30th, 2007 · No Comments

Last Thursday, I attended a cool event at the Accelerator Centre, hosted by the Investment Industry Association of Canada. Ian Russell, the President and CEO of the association, was in town to talk about the state of Financing Small Businesses in Canada.

Ian’s talk focused on four main issues:

  1. The funding gap that exists for companies in the pre-commercialization or early commercialization stages. Government grants support basic research, and VC money is available to more established companies, but there are very limited resources for the company in between.
  2. Tax laws that make it difficult to raise money. Canada’s tax laws punish entrepreneurial and growing companies.
  3. Corporate governance issues. In the post-Enron era, many corporate boards are focused on legal issues, which Ian called “compliance boards”. However, there is a strong need for “guidance boards”, which are hands on, active directors, who focus on competitive issues and actively assisting management in developing strategies.
  4. A strict regulatory regime. The narrow, rules based approach, intended to protect investors, really does not offer much to investors, but is burdensome to small businesses. Ian called for a principles based approach to regulation, where managers would not need to ask “Is this legal?”, but instead ask “Is this right?”

I found this to be an interesting talk. Specifically, I found the corporate governance issue intriguing. In small, growing companies, particularly those with inexperienced management teams, a strong board can be key to the company’s success. In today’s environment, the empahsis placed on compliance may be hindering company’s growth potential, as limited resources are wasted dealing with dotting i’s and crossing t’s, instead of developing strategies to grow and compete more effectively.

After the event, James and I took full advantage of the networking opportunites, and added a few more connections to the electronic Rolodex (aka – Microsoft Outlook). This was probably not the most exciting event of the year, but one more opportunity to meet a few new people and learn a little more about the general business climate in Canada.

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