Waterloo University alumni launch $5m venture fund

Three alumni of Waterloo University – Michael Litt, Devon Galloway and Mike McCauley – have launched a $5m venture fund to help early-stage start-ups exclusively in Waterloo Region, a regional municipality in Ontario, Canada.

The fund has already invested in seven start-ups, and is aiming to support several hundred more as individual investments are kept small at $25,000 to $100,000. Apart from the cash injections, they are also giving companies the opportunity to network with other local entrepreneurs, particularly those with a network extending to Silicon Valley.

The three investors bring with them considerable expertise. Litt’s and Galloway’s company, Vidyard, has raised more than $6.5m in venture capital, while McCauley’s company BufferBox was acquired by Google for $17m in 2012. All three of them used the university’s Velocity Garage incubator at the Communitech Hub in Kitchener, the region’s largest city, and went on to Y Combinator, an accelerator centre in Mountain View, California.

One of the first investments for Vidyard came from the former chief financial officer at BlackBerry, and Litt is hoping that it will make more large-scale investments in the future. Wealth generated by BlackBerry was already used to create the Perimeter Institute for Theoretical Physics, the Institute for Quantum Computing at Waterloo University and the Centre for International Governance Innovation.

Litt observed that Silicon Valley only became a tech cluster when the region’s dominant company, Fairchild Semiconductors, was going under, a similar scenario to what is happening with BlackBerry in Ontario now: “A ton of wealth was generated, individuals from Fairchild started their own companies with the investments from the executives at Fairchild, and that started Silicon Valley. That started the funds. That started the eco-system that developed there.”