Peter Andrews

The TSX Venture Exchange's marketing effort will roll into Ottawa this week as it tries to shed its image as a haven for Western Canadian resources companies.

While technology and biotechnology companies account for just 17 per cent of the listed companies on the Venture Exchange, the bourse's president Linda Hohol will explain how this is changing when she speaks at the Ottawa Centre for Research and Innovation's Technology Executive Breakfast at the Corel Centre on Thursday.

Hohol's speech will mark the beginning of what she describes as an "aggressive communications campaign" that is geared toward drawing new technology startups to the exchange. The main draw, she says, is that raising public money is easier than raising venture capital in many cases.

The exchange's numbers back up Hohol's claims. In 2002, Venture Exchange listed companies raised a total of $1.44 billion in financing. That was a jump of more than $360 million over its previous year.

The Venture Exchange is developing programs that teach its new members the ins and outs of running a public company, such as reporting quarterly results and disclosing pertinent information. Also, the exchange is stepping up its efforts to encourage brokerage companies to begin analyst coverage for new listings on the Venture Exchange.

"We want to minimize the regulatory concerns for investors," Hohol says. "Even though we're junior, we're a quality exchange."

The Venture Exchange is often seen as a Western Canadian market, given that it was formed out of the old Vancouver and Alberta stock exchanges.

Of the $144 billion raised on the Venture Exchange last year, 17 per cent flowed to technology and biotechnology companies.

Its lack of penetration in central and eastern Canada means most tech companies suffer from low stock valuations on the exchange. Of the nine local technology and biotechnology companies that trade on the Venture Exchange, only one company (PharmaGap Inc.) consistently trades over the 50-cent mark. Six of these local companies trade below 20 cents.

In-Touch Survey Systems chief executive officer Peter Andrews knows about the struggles of being a small cap technology company. His company, which recently posted a small annual profit, has languished in the 13-cent range lately. Still, Andrews says he made the right choice when he skipped the private VC route to list on the Venture Exchange via a reverse takeover last year.

"It takes away the need for the draconian California clauses," he says. "I'm not suggesting they shouldn't be there, but this is just a way to avoid that."

Andrews will also participate in Hohol's presentation on Thursday at the TEB.

Andrews says his company might have been able to find less costly ways to raise capital than going public through an RTO, but he doesn't blame the public listing process.

"I'm not sure we didn't have paths that were less costly," he says. "There's no question that it's been a good transaction. If given the chance, would I do it a little different though? Yes."

The Venture Exchange has already organized a similar event in Toronto, where a handful of companies were allowed to pitch to Bay Street executives. "Because of the predominance of private VC, there's still some building to do," Hohol says.

—By Michael Hammond