Regional co-operation took another step forward today, Oct. 4, as Prince Edward Island joined Nova Scotia and New Brunswick in a regional venture capital fund to support high-potential companies in Atlantic Canada.
Companies involved in clean technology, life sciences, information technology and other high-growth sectors will be able to access the fund, proposed by Nova Scotia to help emerging companies that do not have the cash flow to secure financing from traditional lenders.
"Too many emerging Atlantic Canadian companies haven't had access to the funds they need to grow and become more competitive," said Premier Darrell Dexter.
"Atlantic Canada is on the cusp of great opportunity - the federal shipbuilding contracts, as an example. We want companies and individuals to be innovative and build ideas around that opportunity, to commercialize marine technology research and development, to attract and train the best minds in the business, and create higher value jobs for the future. This fund will help us do that."
Prince Edward Island will contribute $2.5 million to the fund, bringing the value to $32.5 million.
"Access to capital always requires large efforts for quickly growing companies," said Premier Robert Ghiz. "I am excited that Prince Edward Island and other Atlantic companies will now have another source of capital to fuel their growth, success and job creation. This is a way for government to promote job creation for new and emerging companies."
There are several provincial and federal programs to help these types of companies, but most do not provide enough capital for them to compete globally.
"Access to venture capital can mean the difference between success and failure for a new company," said GoInstant co-founder Jevon MacDonald. "I know firsthand the impact early investors and venture capital can have on a growing business. A regional fund focused on early-stage investments is great news for promising new startups in Atlantic Canada."
Innovacorp, Nova Scotia's venture capital and technology commercialization corporation, has been working on behalf of the provinces to set up the fund and secure additional investors. A search for a fund manager has been completed and will be announced soon.
Nova Scotia, New Brunswick, Prince Edward Island and Innovacorp will continue to work with private-sector partners, institutional investors and the federal government to ensure the companies with the most potential can compete.
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Halifax, Nova Scotia, October 4, 2012