New VC fund in works

The McGuinty government signs a letter of intent with leading Canadian institutional and corporate investors to create a $165-million, Ontario-focused venture capital (VC) fund. The Ontario Venture Capital Fund will “[strengthen] the provinces ability to support innovative, high-growth companies in Ontario to expand business opportunities and create jobs,” says the Ontario Ministry of Research and Innovation. With $90 million from Ontario and the balance provided by partner investors, the market-driven fund-of-funds, designed to support established VC funds, would be overseen by an experienced third-party manager. The government and its co-investors, including OMERS Administration Corp., RBC Capital Partners, Business Development Bank of Canada and Manulife Financial, are currently conducting a global search for such a manager, whom they expect to have installed when the first round of funds are dispensed in January. “This fund will attract the capital and investment expertise needed to bring exciting new discoveries to market faster in this province, resulting in high-value jobs and, ultimately, a higher quality of life for all Ontarians,” says Minister of Research and Innovation John Wilkinson. News of the fund no doubt comes as a relief to hobbling Ottawa startups, which have been lamed by investor disinterest in recent years. “Ottawa is very much in need of new Ontario-based venture funds and hopefully this will support the creation of some good new funds,” say Jeffrey Dale, president and CEO of Ottawa Centre for Research and Innovation. The Ontario Venture Capital Fund is an initiative of the McGuinty government’s $160 million Ideas to Market strategy, announced in the 2006 budget.

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