The federal government is soliciting interest from private parties that want to team up with Ottawa on its initiative to boost venture capital investments.
After the government first announced it would set aside $400-million to invest in Canadian startups as part of the 2012 federal budget, there were almost no developments for a year. This month, however, Ottawa finally opened up submissions for potential partners and it also relayed some more information on how the initiative will function.
On top of the $400-million promised by the government, Ottawa is hoping to get two-to-one matching funding from private parties – bringing the total amount to $1.2-billion – according to Richard Rémillard, executive director of Canada’s Venture Capital and Private Equity Association (CVCA). If the desired amount is raised, the $1.2-billion will likely be spread across three to four funds of roughly the same size.
Even though $800-million in private funding is the goal, Mr. Rémillard said some of the money could come from provincial governments. The Ontario government recently set aside $50-million for venture capital, and Ottawa said it would match that amount with $50-million of its $400-million. Now the two partners are looking for $200-million from private parties to meet the desired 2:1 ratio.
Private parties interested in playing a role have until June 3 to submit applications to the government. After that, the final partners will be named, the funds will be set up, and then companies looking for funding will be able to reach out.