For the second year in a row, a New Brunswick company has won the Deal of the Year Award in venture capital from the CVCA, Canada’s Venture Capital & Private Equity Association.

The CVCA announced last week that BDC Venture Capital and New Brunswick Investment Management Corp. won the award for their investment in Q1 Labs Inc. of Fredericton, which sold out to IBM last year for an undisclosed price.  Last year, the award went to Summerhill Venture Partners, Brightspark Ventures and BDC Venture Capital for their funding of another Fredericton company, social media analysis outfit Radian6. Both companies were co-founded by Chris Newton, attracted Gerry Pond as an early investor and BDC as a VC investor.

In the melee of preparation for Atlantic Innovation week, this announcement fell through the cracks and I missed it. But I have three observations about the award as I play catch-up on it.

First, the CVCA announcement shows that Q1 was a great deal, but not quite as stellar as Radian6. Q1 attracted nine rounds of financing totaling $42 million over eight years and produced an internal rate of return – the key ratio in determining the annual return for investors – of 32.8 percent and a multiple of 9.0 times original investment.  That’s fantastic, but it pales in comparison to Radian6, which had an IRR of 142 percent and total return of 22.8 times.

Second, it’s entirely conceivable that by this time next year an Atlantic Canadian company will have won the award three years in a row. GoInstant of Halifax in July sold out to Salesforce.com for more than $70 million about a year after taking VC money. I’m no accountant but it reportedly produced something like a return of 10 times in a year. Gadzooks, that’s a great deal! Possibly worthy of the CVCA award. Two or three years ago, Atlantic Canadian entrepreneurs had a hell of a time drawing any interest from VCs outside the region, and now we’re talking about the possibility of a threepeat. It’s all helping to change attitudes to the region by people who control investment decisions.

And finally, The CVCA announcement highlights an issue we tend not to mention in polite company. BDC Venture Capital did its two best deals ever (Radian6 and Q1 Labs) in a region it has since left. It’s an open secret that the federally owned financial institution plans to participate in the Regional Venture Capital fund. Now it’s time to get on with opening that fund and welcoming BDC back to Atlantic Canada. This is an exciting part of the world right now and BDC VC should be here. There’s a lot of stage whispers around Halifax suggesting an announcement on the new fund is coming soon. Let’s hope the talk is accurate.