Toronto, December 18, 2017—Innovation, Science and Economic Development Canada
Access to capital is vital for growing companies to develop ideas, market new products and create middle-class jobs in communities across the country. Venture capital is a unique type of private equity financing; it takes educated risks on great ideas and smart people.
The Honourable Navdeep Bains, Minister of Innovation, Science and Economic Development, and the Honourable Bardish Chagger, Leader of the Government in the House of Commons and Minister of Small Business and Tourism, today launched the Venture Capital Catalyst Initiative (VCCI).
VCCI will make $400 million available through the Business Development Bank of Canada (BDC) to increase late-stage venture capital funding for Canadian firms looking to grow, expand and compete globally. Late-stage funding is financing required by an established firm to support product development or major capacity expansion. It enables companies to hire additional talent, test market new products, and expand to new markets in Canada and abroad. VCCI will complement other programs under the Innovation and Skills Plan to help grow Canada’s most innovative firms, support greater diversity and address gender balance in the VC community.
Today’s announcement officially kicks off the call for proposals for VCCI support. Successful candidates will be required to report on the gender balance of the fund managers and entrepreneurs they support. In addition, the government will establish a private sector selection committee to evaluate incoming proposals and provide recommendations on selections to the Deputy Minister of Innovation, Science and Economic Development Canada.
“VCCI is one of the essential pillars of our Innovation and Skills Plan. The goal of VCCI is to support the growth and scaling-up of our best start-ups to turn them into global champions. This program will support Canadian firms in creating the jobs of today and tomorrow. I am also very proud of the fact that this new initiative is putting forward concrete steps to promote diversity and gender equality in the innovation ecosystem. An open society that values a diversity of ideas and perspectives is good for business.”
– The Honourable Navdeep Bains, Minister of Innovation, Science and Economic Development
“Having access to venture capital can make all the difference in helping Canadian small businesses take their ideas to market. In recent years, Canada’s venture capital market has come a long way. More and more, innovative start-ups and small businesses now are able to find Canadian investors to support their ideas. Yet our government understands that more needs to be done, especially for under-represented groups like women, Indigenous or immigrant entrepreneurs. Through our new Venture Capital Catalyst Initiative, we are taking important steps to enhance support for these groups—both in terms of the fund management and in the actual investments made. By focusing on strengthening diversity, we are building a more robust Canadian venture capital industry that embraces principles of fairness and gender equality and helps entrepreneurs create the good middle-class jobs of tomorrow.”
– The Honourable Bardish Chagger, Leader of the Government in the House of Commons and Minister of Small Business and Tourism
“The VC industry plays an essential role in helping our most innovative entrepreneurs get started and scale their companies to compete with the best in the world. As the most active VC investor in the country, BDC is uniquely positioned to unite the best players in the ecosystem and create a new generation of international champions for a more prosperous Canada.”
– Michael Denham, President and CEO of the Business Development Bank of Canada
- By investing alongside the private sector, VCCI is expected to inject around $1.5 billion into Canada’s innovation capital market.
- VCCI will be administered by BDC. This initiative builds on the success of the Venture Capital Action Plan (VCAP) launched in 2013, which leveraged $390 million in government capital to raise over $1.35 billion and has already made $820 million in commitments to 25 Canadian funds.
- Over 197 innovative, high-potential Canadian start-up companies have received capital from funds supported by VCAP.
- 2016 marked the seventh straight year of growth for venture capital in Canada and the most venture capital invested in start-up companies since 2001.
- The Canadian Venture Capital and Private Equity Association attributes much of this growth in venture capital to the impact of VCAP and the Government of Canada’s support for venture capital. VCCI will continue to build on this momentum.
- Canada is now ranked third for venture capital investment according to the OECD.
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Follow Minister Chagger on Twitter: @MinofSBT
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