The Canadian Venture Capital Association released its latest performance numbers Monday and the news is not good for the industry -- to say the least. Investment returns in early stage companies -- even with Labour Fund incentives -- is mostly in negative territory. Which makes us wonder why anyone would want to entertain that segment of the Canadian market. Yet we know that without early stage investment many companies will not mature to the point where they can create real wealth for investors. It is a paradox and one that demands some kind of systemic solution. Do we need a system of tax credits for the industry? If so, what form would those tax incentives take? It is clear by the CVCA's numbers that the Labour Fund did not make early stage investment financially rewarding for the sector.

As we reported last month, Canadian tech companies when they do succeed outperform their U.S. counterparts. So there is reason to invest in early-stage Canadian companies. But the way we have been doing it for the past decade or so is not working.

Take a look at the full report here.