By Derek Moscato

Thanks to its mix of aggressive investing and experienced management, Ventures West Management has grown from a West Coast sugar daddy helping invigorate British Columbia's high tech industry to become a pan-Canadian venture capital heavyweight. Founded in 1968, the Vancouver-based firm was originally an advisory service helping companies across the business spectrum raise money. Today, Ventures West focuses specifically on IT, biotechnology, industrial products and alternative energy, managing over $300 million in several pools of venture capital.

Many of its investees have gone from fledgling start-ups to IT gorillas, including Pivotal Software, a developer of digital Customer Relationship Management ( CRM ) applications. In fact, the firm's portfolio reads like a who's who of Canadian high techdom, and includes IT companies Burntsand, FloNetwork and NCompass Labs, along with telecoms Sedona Networks, Novatel Wireless and Nuvo Network Management. While 40 per cent of its investments are in B.C. firms, Ventures West also has offices in Toronto and Ottawa to embrace the abundance of IT opportunities east of the Rockies. In Ottawa, for example, it has equity in 10 companies, including Sedona and ATMOS Corp.

Ventures West likes to back early-stage companies developing dynamo technology products. "It's more risky, but the rewards are bigger if you get it right," says president Robin Louis, who holds a PhD in physics, is a director of five high tech firms and was the CEO of Columbia Computing Services Ltd., a TSE-listed software company that became the leader in its niche.

Of course, technology alone won't sustain a start-up through its growing pains, and Ventures West also focuses on the quality of a company's management. "You need a management team that has the drive, the commitment, the experience, and that looks like they have a shot at being a market leader," says Louis. Most of the firm's investments in individual companies amount to $5 million to $7 million over several years. Like other venture capitalists, Ventures West has high expectations for its companies, aiming for returns five to 10 times the initial investment. But the firm doesn't set a time horizon for redeeming its investments. "It depends on the needs of the business," says senior vice-president Barry Gekiere. "We work with companies for extended periods to make sure they're going public at the right time." That combination of flexibility and patience has allowed the firm to get in early on - and then cash out of - some lucrative deals.

During the mid-1990s, it helped Toronto-based Linkage Software make the transition from a systems builder and consulting shop to a developer of e-mail connectivity and directory synchronization software.

While Linkage was planning its second generation of products, Ventures West assembled and led a venture syndicate to tweak the firm's strategy and provide guidance on the execution of its business plan. After a string of successful product launches, Linkage was acquired by Microsoft in 1997.

"We came in when other people didn't show interest," says Gekiere, who sat on Linkage's board and helped recruit senior management. Ventures West's access to key business networks was one of the major contributions it made to Linkage's success, but it wasn't the only one. "From asking informed questions about our operating performance to providing advice during the sale to Microsoft, Ventures West stood at our shoulder," says Robert Jull, former president of Linkage.

Linkage is the kind of success story in which Ventures West takes special pride. Not only did it dole out the dollars, it also shared its breadth of industry knowledge. "We're a very active investor," says Louis, whose firm usually takes a seat on the board of the company in which it invests. "We spend most of our time working with the investee companies. Having said that, if the company's doing perfectly fine, we don't want to get in their way." He might well be referring to Pivotal. The software firm impressed Ventures West back in 1995, after it had assembled what Louis calls "an absolutely stellar management team." After several rounds of investment amounting to $5 million, Ventures West has a winner on its hands.

The Pivotal relationship underscores Ventures West's commitment to world-class technology products and top-flight management teams. It's a one-two punch that has allowed the firm to grow into a venture capital mainstay on the Vancouver scene, and a reputable player nationwide.