Matt Shares the Origin Story of PVSOF I

I’m really proud to discuss the first close of our new Fund: Plaza Ventures Special Opportunity Fund I (‘PVSOF I’), the first of its kind in Canada. The mandate of the Fund is to acquire direct secondary shares from early angel investors and/or employees in very late-stage, iconic Canadian tech companies.

A few months ago, our team was approached by several angel investors and early employees who were looking to sell their portion of shares in some of Canada’s high-growth pre-IPO companies. As our window into the secondary share market opened, thanks in part to these angel investors and ex-employees, as well as to our own research, we realized that direct secondary investing in Canada was a greenfield opportunity. There are several firms in the US who run secondary funds as a core practice and/or as a sleeve on their platform, so the precedent has been set. We’re not talking about the huge funds that buy out LP positions in sunsetting VC funds, but rather the funds who focus on direct purchase of securities from early company shareholders.

Compared to the US, Canada has long lagged behind in growth and secondary capital. Ten years ago this gap made intuitive sense. But today, there are well over 80+ private, late-stage technology companies that are thriving in Canada ($30M+ in revenue with a clear line of sight for a large growth round or IPO) and attracting international attention. Of late, large American and international funds have led the largest investment rounds in Canadian history: $100mm into Coveo, $80mm into Ecobee, $72mm into TouchBistro, $70mm into Ritual, $65mm into Wealthsimple, $60mm into Wattpad… The list goes on and on. The Canadian tech ecosystem is on fire and evolving, and the growing success of our entrepreneurs is partially attributable to the early stage support from Canadian investors, institutions, angels, accelerators, incubators and innovators in the years since the last economic recession.

Bearing all of this in mind, we concluded that 1) the local secondary market represents a ripe investment opportunity for Canadian families and institutions (who until now have had no vehicle of access) and, 2) now is the right time to pioneer a Fund of this nature. So in June we launched PVSOF I – a late-stage Fund designed to complement and augment our core growth-stage micro-funds, which remain wholly concentrated on rapidly growing Series A and B companies.

Feedback from the LP community and Canadian growth companies has been tremendous. This model, which grew organically from our deep ecosystem relationships, allows Plaza Ventures to bring value to the management teams and boards of pre-IPO companies by helping to streamline their cap tables in preparation for an exit event, while providing liquidity to those who were early supporters of these now successful businesses.

Yesterday, we officially completed the first close of PVSOF I in just eight weeks of marketing the Offering Memorandum! We will be closing the first few investments from the Fund in the coming days and very much look forward to revealing our new portfolio companies. We’re sure that you will recognize the names!

Please drop us a line with any thoughts on the model or leads to angel investors/ ex-employees who want liquidity.

Matthew Leibowitz

General Partner, PV