We describe and analyze how a stock exchange can be used to finance emerging companies and to assume the role usually played by private VCs. We find that the Canadian public VC market has a success rate which is approximately four times the corresponding rate for private VC. The public VC market provides approximately seven times as many new listings to the main market as private VCs. For a five-year horizon, the delisting rate of newly listed companies is much lower than the failure rate observed for the private VC sector in Canada. Finally, the comparison of the returns shows that the public VC market outperforms the private one. We conclude that a public VC market is indeed able to compete with a private one, even if it does not have the tools, skills and value added capabilities usually attributed to private VCs.

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