Investment yields 272% returnSeptember 21, 2006Vancouver Sun By Fiona Anderson BC Advantage Funds wins the Canadian Deal of the Year Award A young Vancouver-based venture capital fund has won the Deal of the Year Award from Canada’s venture capital association for investing in a local startup that yielded a whopping 272 per cent annual return. BC Advantage Funds VCC Ltd. invested $225,000 in Victoria-based Aspreva Pharmaceuticals Corp. in 2003 before the company went public, BC Advantage’s chief executive officer Frank Holler said in an interview. This year, it sold its stake in the company, which was held in its life science venture fund, for more than $5.2 million. That works out to a return multiple of 23.4 times capital and an annual internal rate of return (accounting for the timing of the investments and the proceeds realized) of 272 per cent, Holler said. It was those numbers that attracted the attention of, and the award by the Canada’s Venture Capital & Private Equity Association, the national organization of venture capital funds. The award is given to the venture capital fund that achieves the highest realized return on an investment. To win the award, the three-and-a-halfyear-old fund had to beat out a number of much more seasoned veterans. “As a relatively young fund to be in against a lot of well-established funds we’re pretty pleased to come out on top with this award for 2006,” Holler said. Holler attributes the fund’s success to three factors: it is managed by experienced entrepreneurs; it gets in early, often getting involved in the startup of a company and the licensing of the intellectual property; and it actively mentors the companies it invests in by providing a pool of accomplished experts in the field to act as managers, directors or advisers. “We get very hands-on with these companies and roll up our sleeves and work with the management to try to make them a success,” Holler said. “We believe these companies need a lot of help in the early years to ensure they develop good strategies and that they execute on those strategies and they don’t fall into the many potholes that can occur in early-stage companies,” he added. Holler has his own experience to bring to the table. In the early 1990s, he founded ID Biomedical Corp. which was bought out by GlaxoSmithKline Inc. for $1.7 billion last year. He also was one of the founders of Vancouver-based Angiotech Pharmaceuticals. British Columbia has “some very talented entrepreneurs who have been innovative and have developed some exceptional companies,” Holler said. “And we’ve been fortunate to be part of that.” Because of its hands-on approach the life sciences fund currently holds only six companies, Holler said. The company’s other two funds — the Advantage BC Tech Fund and the Advantage Venture Fund — have as many as 18. “We need to be able to give each company a lot of personal attention,” Holler said. |
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