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Stock image representing the world of cloud computing.Dariusz Miszkiel

Finding Canadian companies for Summerhill Venture Partners to back is not going to be problem. Tasked with distributing $15-million in federal funds, the firm says that the list of deserving companies in Canada is only getting longer.

Summerhill is one of four venture capital fund managers splitting a $50-million government investment, which was announced last month. Though Summerhill's strategy involves looking all up and down eastern North America for deals, increasingly the focus will be on opportunities close to home.

The government obviously wants to see that money put to work supporting companies in Canada, and Summerhill managing partner Gary Rubinoff said his team has a pipeline of deals that should ensure that happens.

"The focus is going to be more in Canada than in the U.S.," says Mr. Rubinoff. "We're excited about that, because we're seeing a lot of great technology come out of this country."

He says that there is an "overwhelming plethora of really good companies that we're seeing. It's great to see."

The companies stretch along a corridor from Waterloo, Ontario to New Brunswick, he said. They work in areas such as cloud computing, mobility and video.

The jump in entrepreneurship comes in part from the fact that it's now much cheaper than ever before to start a company, Mr. Rubinoff added. The availability of the cloud and distributed software, for example, have vastly lowered the cost of starting a company.

"Instead of costing $5-million it might cost half a million," he said. That is a lot easier to raise.

Summerhill's niche is in what Mr. Rubinoff calls "the plumbing in the background." Rather than consumer plays, such as looking for the next Facebook, Summerhill looks at the applications that "allow companies or service providers to take advantage of new innovation." (You can view Summerhill's portfolio here. )

For example, Summerhill backed a New Brunswick startup called Radian6 Technologies Inc. It led the first round of $4-million in 2007. Four years later, Salesforce.com bought Radian6, and the investors made 22.8 times their original investment. Another portfolio company, JumpTap, is about to be sold.

The returns on its first fund have been in the top quartile of venture capital, though Mr. Rubinoff declined to provide specific numbers. They were enough, however, to make Summerhill one of the four funds chosen by the government out of 27 that applied. (Here's the government backgrounder on on the selection process.)

The $15-million of government money will go into the second fund from Summerhill. The firm is aiming for a total fundraising of $150-million to $175-million, about the same size as its first fund. Other investors include the Abu Dhabi Investment Authority.