New CVCA Member Profile: Investissement Québec
Photo: Benoit Leroux and Alex Laverdière, Investissement Québec, Courtesy: Investissement Québec.
The CVCA is excited to kick off a brand new series for CVCA Central, which will profile our new members and provide insight on these invaluable organizations in our community.
Debuting in the new member series is Investissement Québec.
Investissement Québec’s mission is to play an active role in Québec’s economic development by spurring business innovation, entrepreneurship and business acquisitions, as well as growth in investment and exports. Operating in all the province’s administrative regions, the Corporation supports the creation and growth of businesses of all sizes with investments and customized financial solutions. It also assists businesses by providing consulting services and other support measures, including technological assistance available from Investissement Québec – CRIQ. In addition, through Investissement Québec International, the Corporation also prospects for talent and foreign investment and assists businesses with export activities.
We had a (socially distant) conversation with Alex Laverdière, Senior Director, Venture Capital, and Benoit M Leroux, Senior Director, Investment Funds at Investissement Quebec.
Tell us about Investissement Québec, its history, role and vision.
Investissement Québec: It’s a well-kept secret that Investissement Québec is a leader in venture capital, not only in Québec but also in Canada. Over the years, we’ve invested in innovative and visionary businesses, either directly or indirectly through specialized funds.
Through our direct funding, we’ve accelerated the growth of promising and fast-growing businesses such as Lightspeed POS, Coveo, and Hopper. We work with companies in the early-stage and later-stage VC to support the commercialization of innovative technological solutions. And we do this by acquiring an equity stake of 5% to 30% in companies in the form of share capital. We invest a minimum of $1 million, and there is virtually no maximum. As partners for the long term, we will support these businesses, as long as our role is critical.
Through indirect funding, Investissement Québec sponsors and manages more than 70 funds. We currently have approximately $1.2 billion in exposure in these funds, which encompass more than 1,200 companies, and most of which are based here in Québec. This enables our portfolio managers to support businesses according to their specific sectors and needs, at all stages of their growth (seed, start-up, post-startup, growth, development capital, business transfer).
Our ultimate objective is to provide Québec entrepreneurs a complete capital chain. For each of these vital links, they can rely on performance-driven and specialized managers to meet their needs in key sectors, including ICT, life sciences, manufacturing and clean technologies. Some of our partners include ACET Capital, Amplitude, ArcTern, Brightspark, CTI Life Sciences, Cycle Capital, Inovia Capital, Lumira, Novacap, Real Ventures and White Star Capital.
For those of you less familiar with Investissement Québec, our services are highly diverse. We play a complementary role by working with key players in the financial ecosystem to foster business innovation, support entrepreneurship, and to ensure the growth of investments and the acceleration of our exports. To do that, we can tap into our network of 30 offices in the 17 administrative regions of Québec that offer customized financing and investments to support the development of businesses of all sizes, as well as cooperatives and social economy enterprises.
Investissement Québec also offers consulting services to help guide companies through industrial transformation and innovation processes. Thanks to Investissement Québec – CRIQ, entrepreneurs can access technological support to improve their productivity, sharpen their competitive edge and develop their environmental performance.
With Investissement Québec International, the Corporation also ensures that it attracts more talent and foreign investment in all regions of Québec, all while offering specialized assistance to Québec companies looking to develop their exports and diversify their markets. To make this happen, Investissement Québec also relies on a network of experts in 33 offices around the world, in 18 countries, and three offices in Canada.
How did you both come into the roles that you were in? What were you doing prior to being at Investissement Québec?
Alex Laverdière: I joined Investissement Québec seven years ago and was a part of the launch of the direct investment venture capital arm before becoming the head of the team. Prior to that, I was in charge of a portfolio in a small fund sponsor by Investissement Québec where I was surrounded by entrepreneurs who were also investors in the fund. I’ve learned that when investments are closely tied to the calibre of people in organizations, we can build big companies because they know exactly what they’re doing. We continue to do the same today by surrounding ourselves with great entrepreneurs and partners who can also provide us sound advice to ensure that we are doing the best thing for our portfolio company and the ecosystem.
Benoit M Leroux: Before Investissement Québec, I had my own business as an attorney. I received a call from a friend who had recently been hired by the organization, which led to my decision to join the corporation seven years ago. Together, Alex and I really tag teamed and worked with Investissement Québec from the ground up. We’ve been an investor in funds for the last 15 years. Our common goal has always been to help provide smart capital to our local entrepreneurs, even if it means attracting GPs outside of Québec.
What is the Investment team like at Investissement Québec?
Investissement Québec: We have quite a diverse team, which consists of women and men from all over the world and each with their own expertise, including folks in finance, accounting, and legal. It’s important to embrace a diversity of opinions because at the end of the day, we are essentially agnostic. Whether it’s gender, ethnic background or specialization, our diversity enlarges our horizons and provides us more depth for discussion. In the end, it gives us a unique perspective to handle any situation that may arise.
Given the COVID-19 pandemic, can you tell us about what you see down the road and any exciting developments?
Investissement Québec: Let’s first talk about the pandemic. We have worked closely with our portfolio to make sure that everybody was well-prepared to adapt to the new reality with sound planning and dynamic solutions. We are fortunate to have exceptional entrepreneurs and great firms who helped us build those plans and ensure that the companies that we invest in, and who we partner with, are in good shape.
With COVID-19 taking a toll on the ecosystem, young startups will have a hard time to survive. Investissement Québec is ready to support these businesses to ensure that they have access to the capital they need to weather the crisis.
From an opportunity standpoint, we will continue to be active during the pandemic. We also know that it is the right time for medium and large businesses to undergo a digital transformation. After all, the companies that will be positioned to succeed at the end of the pandemic will be those that innovate and can offer new services and new products. We believe things are going to dramatically change, including the way we do business. This represents an excellent opportunity for young innovative companies to bring their products to the market.
Another opportunity we see is on the M&A side. Several sectors will experience significant delays due to the pandemic. Less well-capitalized companies will have to exit prematurely and we will see a lot of consolidation in some sectors. We can support these businesses during this critical process allowing them to be predators rather than prey.
Today, we are proud of the involvement and response of the Québec government and Investissement Québec in the local ecosystem. If we look across Canada, BDC has done terrific work supporting Canadian businesses. At the provincial level, it’s important to note that the Québec government has launched a program of $2.5 billion of debt warranties that have been given to local entrepreneurs. Add to that an envelope of more than $200 million for local regional investments. We’re also working closely with Québec’s officials on many initiatives in the FoF to help our best managers with additional funds in the coming months.
We believe that these programs are essential to the health of the Québec ecosystem. Funds such as the Fonds FSTQ, Fondaction, Teralys and CDPQ are generated by institutions that were built in Québec. In turn, IQ has worked closely with these organizations to support local entrepreneurs and managers.
Throughout these challenging times, we have also been impressed by the level of communication between all of the stakeholders. Oddly enough, even though COVID-19 has kept us isolated at home, we’ve never been so constantly connected with our partners. Each week, we discuss how we can address the situation and make sure that our fund managers are able to raise new funds. Investissement Québec has been supporting these funds for the last 15 years and our staying power is exceptional. In fact, in some cases, we’re involved in the fourth fund and even fifth fund. Ultimately, we are sending a clear message to fund managers that Investissement Québec will not only be there for them but also increase its presence.
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