Wednesday, November 14, 2007

Venture Capital in Ontario: The Final Nail or Resurrection?

Today the Ontario Government announced the first phase of its Ontario Venture Capital Fund. The fund, announced before the elections last spring, is seeded with $90 million of government money and additonal commitments of $75 million from RBC Capital Partners, OMERS, Business Development Bank and Manulife Financial. In its press release, the Government hints at additional commitments from further corporate and institutional partners.

For entrepreneurs, this will be great news - at some point. Note that the fund has not yet closed and, more importantly, the manager of the fund has not been named. Rumours have abounded on this for several months; two particularly popular ones are that the Ontario government is trying to raise at least $250 million for the first fund, and that it is looking for a US general partner to manage it. Time will tell if any of this is true.

Until then, today's release is being heard by some as a great sucking sound, made by the institutional partners as they withdraw their suppport from local venture funds and concentrate their Ontario-based venture capital bets here. Until the fund is acitvely investing, some think today's announcement has added to the uncertainty facing local entrepreneurs.

Watch closely for further announcements. For me, the announcment of who the fund manager is should tell us much about the future direction and focus of early stage funding here in Ontario. Interesting times ahead.

1 Comments:

Anonymous Anonymous said...

Hopefully they follow true to the Israeli Yozma model and really make this think work.

6:53 PM  

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