How many investments does Covington make every year? On average, Covington will invest in two to five new enterprises per year. This is in addition to follow-on investments in current portfolio companies.
How confidential is my business plan? We consider business plans to be confidential and proprietary and we regard them as such. However, due to the high volume of investment ideas we are exposed to, we are not always willing to sign a Non Disclosure Agreement (NDA) during the initial stage of discussion.
Where does Covington invest its capital? Covington mainly invests in Ontario-based businesses.
Who are Covington’s investors? Covington, as the manager of a number of Labour-Sponsored Investment Funds (LSIFs), has a retail investor base of thousands of individual investors.
What investment restrictions are imposed by LSIF legislation? Covington is licensed in Ontario, and as such is governed by both Ontario and Federal regulations. The LSIF legislation places a few restrictions on our investments. At the time of investment:
the company must have less than 500 employees
50% of salaries must be paid in Ontario
the company must have less than $50 million in assets
the company must be based in Ontario.
What is the typical size of an initial investment?
Covington invests anywhere from $500,000 to $7,000,000 as an initial investment. However, we have invested as little as $200K to help develop an idea; it is never too early to approach us. We generally also participate in follow-on financing rounds and assist in finding co-investors in these rounds.
Are investments by Covington debt or equity based? We primarily make equity-based investments or debt/equity investments that convert to equity at a later stage. We are not lenders and do not participate in debt-only investments. If you are looking for a debt-only investment, we may be able to recommend a suitable debt-partner.
How much equity do I have to give up for an investment? That depends entirely on the amount of the investment, the valuation of the company, the stage of the company, the future potential for growth and the proposed exit strategy.
What is Covington’s management Involvement? We are not operators or interested in taking over an investee company. We are venture capitalists with experience in working with entrepreneurs, as partners, and helping to build your business.
Does Covington always take a board seat? Covington, as an active Venture Capital investor, prefers to take a board seat. In our experience, active participation on a company's board helps us to maximize our contribution to the company's long-term growth.
How do I approach Covington about investing in my company? The best approach is to contact Covington through someone with whom we already have a relationship. If you cannot find a point of contact please complete the Business Plan Submission Form. For details as to what your business plan should contain, please refer to
Initial Assessment
Evaluation
Due Diligence
Management and Investment Committee Approval
For additional details on Covington's Investment Review Process, please refer to Submitting a Business Plan.
Why choose Covington? We believe that a Venture Capital firm should not be simply a source of capital -- we believe that our core strength is our people. Covington prefers to work as a financial partner with its portfolio companies to provide access to our resources, collective experience and extensive network.
As there is far more to venture capital than simply money. A good venture capital will have both a substantial capital base to ensure they can support future rounds of financing as well as established relationships in areas that can relate and benefit your enterprise's long-term growth strategy.
