Government program to “unlock” half billion in venture cap for Ontario firms
Okay, to be clear from the start the “fund” mentioned in the headline isn’t just for cleantech ventures but also companies in the life sciences and digital media. That said, the “Emerging Technologies Fund” announced today by John Wilkinson, Ontario’s minister of research and innovation, could prove effective if administered properly.
The Ontario government has created the $250-million, five-year fund to help ventures based in the province navigate through the dreaded “Valley of Death” that far too often sucks the life out of companies poised for great things but incapable financially of delivering. It’s essentially a co-investment fund, based on a model out of Scotland, whereby the government will match, dollar for dollar, any funding of Ontario-based companies that comes from qualified venture capitalists and angel investors. Nifty.
The government doesn’t decide who gets the money. It relies on the judgement of the private-sector investor that has agreed to participate in the program. If it’s good enough for the private guys, it’s good enough for the public guys: that’s the philosophy, as long as the company has a substantial presence in Ontario. And, like the private investors, the government gets the same terms — i.e. the same stake in the company. So it’s not a handout, it’s a true investment with the same risk-reward profile and an expectation of a return.
The beauty of this approach is that it injects more capital into the local pool, allows the private sector to share some of the risk, and “unlocks” capital that might otherwise not flow into Ontario. I only wish the fund was totally devoted to Ontario-based cleantech companies.
Click here to read more in my Toronto Star article. Now, all we need is for the province and municipalities to move beyond demonstration and start buying local cleantech products and services as part of strategic procurement program.
Tags: cleantech, emerging technologies, ontario, venture capital
Tyler Hamilton is editor-in-chief of Corporate Knights magazine and a business columnist for the Toronto Star, Canada's largest daily newspaper. In addition to this Clean Break blog, Tyler writes a weekly column of the same name that discusses trends, happenings and innovators in the clean technology and green energy market. This blog is a personal project started in April 2005. It is not an official blog of the newspaper.
