A Toronto-based venture capital exchange which says it has big buck venture companies ready to invest says it’s finally open for business.
However one of the Canadian venture firms which is supposed to be associated with the operation says it knows nothing about it.
The Venture Exchange Network, a partnership between a private Toronto company and KPMG LLP, said in news releases this week that it has signed up some of the biggest VC names in North America and is now receiving business plans.
“”Our goal is to be the true venture capital exchange and the only exchange for private equity,”” exchange CEO Clare Cowan said Wednesday.
The exchange says that for US$825 an entrepreneur can file a business plan that will be screened with the help of KPMG. If it fits the criteria of the exchange’s venture capital members the plan will be forwarded to them for consideration.
In a news release April 15 with a Toronto placeline, the company says Montreal’s CDP Sofinov, one of the biggest venture firms in Canada is one of those members.
However, a spokesman for the financial giant who saw the release is baffled.
“”I even talked to Denis Dionne, who’s the president of CDP Sofinov and that doesn’t ring a bell to him,”” said Lucie Freniere of the Caisse de dépôt et placement du Québec (CDP). Sofinov is the Quebec company’s venture arm.
“”Either it’s a mistake or… No one knows what Venture Exchange Network is or why our name is there.””
In reply, John Kozak, the exchange’s COO said it dealt with Fredrick Bezon of Sofinov, whose title he didn’t know. At press time Sofinov had closed and couldn’t be reached for comment.
Kozak said it was possible, but unlikely, Dionne wouldn’t know about the exchange membership. Vencaps have to fill out an extensive on-line application and be vetted by the exchange, he said.
The Toronto news release lists other Canadian venture companies as members. Neither they nor Sofinov are listed in a press release with a New York placeline on the exchange’s Web site, though it lists a number of big name American members.
Cowan is the majority owner of Goldcare Indutiae Inc. of Toronto, which owns the exchange and is funded from private North American and European investors.
None are members of venture capital companies.
The exchange is similar to others such as Toronto’s VentureDrive, which say they can link entrepreneurs to investors.
The Venture Exchange was originally named VenturePie and a press release was sent to the media in March, 2001 describing its operations and inviting entrepreneurs to search for compatible investors. Later a Web site with the name VenturePie.com was set up. Cowan, however, said that release was only sent out to test media reaction to the idea.
Cowan said a Linux-powered software engine that uses algorithms created by KMPG calculates whether business plans, which are submitted online, meet up to 100 criteria set by VCs. Since February, 225 business plans have been submitted and 40 accepted by the exchange, she said. Of those 15 are being evaluated by VCs.