Venture Capital Investing in Canada: Legal Considerations for U.S. Investors
|Area||Corporate Finance and Securities, Technology|
2015 was a banner year for the Canadian technology sector. On the heels of Shopify’s highly successful IPO, a number of successful Canadian startups, including Lightspeed Retail, Kik Interactive, Hootsuite, Desire2Learn and Vision Critical, may be poised – subject to a return to more favourable market conditions generally – to enter the public markets at significant valuations. At the same time, venture capital activity in Canada increased meaningfully in 2015 relative to 2014, with the number of deals up 4% and the amount invested up 11% according to Thomson Reuters. Over the past five years, total venture capital investments in Canadian companies have doubled to US$2.6 billion, with 2015 representing the best year in terms of total capital invested since 2002.
This publication summarizes some of the key Canadian legal issues relevant to U.S. investors who may be considering an investment in a Canadian technology company.