Oil and gas companies may not be the only ones who are happy when prices are high.
For one of the few venture capital companies in Calgary raising funds for both the energy and technology sectors, booming oil and gas prices may be a blessing in disguise.
“I prefer it when prices are high,” says Network Capital Inc. managing director Bill Bonner.
Bonner, a 20-year veteran of the energy banking market, is the first to admit getting people to invest when prices are high is difficult.
“It’s an odd perversity,” he says. “Typically, what gets people excited is growth. But they don’t want to pay for it — they’re afraid prices will fall.”
Yet, with an energy market at perhaps its strongest in 20 years, Bonner says financing is less of an issue. Although companies require capital to grow, high revenues are reducing the need for access to capital markets.
When it comes to the technology sector, however, the tables are turned. A bumpy year for tech stocks has left many investors wary. For companies like Network Capital, that uncertainty creates an opportunity.
“Technology is not going anywhere, technology is here to stay,” Bonner says. “Whether fund managers are prepared to pay up these stocks we don’t think matters, because we think oil and gas will.”
In fact, the energy industry is credited with helping to develop Calgary as one of Canada’s top high-tech centres. An industry reliance on technology has spawned an acceptance of, and understanding for, things that are new.
Coupled with a strong entrepreneurial spirit, that translates into a financing-friendly environment.
“There are lots of stories of people who left big energy companies to strike out on their own and did well,” Bonner explains. “Investors in Calgary are willing to listen to those stories and willing to invest money. It’s a very positive environment . . . that in other centres, we don’t see so much.”
