Ottawa launches $400 million venture capital fund

The federal government is getting into the venture capital game with a $400 million fund to help high-growth companies access capital.

The federal government is getting into the venture capital game with a $400 million fund to help high-growth companies access capital.

On Tuesday, Prime Minister Stephen Harper unveiled the new Venture Capital Action Plan, which will see $400 million invested over the next seven to 10 years.

"Our government understands that Canada's long-term economic competitiveness in the emerging knowledge economy needs to be driven by globally competitive, high-growth businesses that innovate and create high-quality jobs," said Harper.

"We will provide the resources needed to put Canada's venture capital industry on the path to sustainability and ensure Canada's high-potential firms have the resources they need to succeed."

In next week's Business in Vancouver profile, Bill Tam, CEO of the BC Technology Industry Association, says a lack of access to capital is the principal limiting factor in keeping Vancouver's technology industry from growing a middle class (companies with between 50 and 500 employees).

"Here in B.C., roughly 3% of our companies are 50 people and above," Tam tells BIV. "If we look at competitive jurisdictions, especially in the U.S., you'll see that the middle class is usually around 8% to 10% of the population of the companies."

Tam said the new fund is welcome news for B.C.'s technology sector.

"We see it as a positive signal of the federal government's commitment to supporting entrepreneurs and innovation," he said.

"It's consistent with our four-point plan for growing the technology industry in B.C. and will help to catalyze a more sustainable capital ecosystem that will propel the growth of more world-class technology companies."

The new $400 million fund is intended to help leverage private sector investment and create new large-scale venture capital funds. The money will be broken down along the following lines:

• $250 million to create large private sector-led national funds in partnership with provinces and institutional and corporate investors;

• up to $100 million to recapitalize existing large private sector-led funds; and

• up to $50 million in three to five existing high-performing venture capital funds in Canada.

nbennett@biv.com

@nbennett_biv

comments powered by Disqus

Also Read

More From Innovation

By the end of this year, Victoria-based studios will launch seven new video games — a sign the high-value sector is growing rapidly  

Read Article

Vancouver’s BroadbandTV is seeing rapid growth, including an increase in monthly impressions of...

Read Article

More than half of female MBA-holders working in technology firms leave the industry because of male-dominated business culture, a new report reveals

Read Article

San Francisco-based company now valued at more than $1 billion, while its Vancouver-based CEO aims to ramp up hiring at Yaletown office  

Read Article

While some organizations are pushing for closer ties between the cities’ startup communities, others in the tech sector are looking south of the border

Read Article

Subscribe to our mailing lists

* indicates required

Newsletters

* You can modify your newsletter subscriptions at the bottom of any newsletter you receive.
×