Victoria commits $55m to 4 venture capital funds

By Fiona Anderson
 
The British Columbia government has committed $55 million to four venture capital funds in the hopes the funds, and their partners, will invest much more than that in venture companies in the province.

The money is part of the $90-million B.C. Renaissance Capital Fund announced in 2008, aimed at helping fund B.C. startups in information technology, life sciences, digital media and clean technology.

But the funding in B.C. companies is indirect. The government gives money to the fund manager and the manager decides where it goes, which may or may not be inside the province. The key, however, is picking companies that are likely to invest in B.C.

“We make no commitments that they have to invest their money in B.C. because we’re confident of our own opportunities,” said Todd Tessier, vice-president of venture investments with the B.C. Renaissance Capital Fund. “What they did have to commit to was to have a strategy for making sure that they got to see the best B.C. opportunities.

“We help them with that,” Tessier said. “We’re always there trying to pitch them with what we see as very, very promising opportunities. And they like us when we do that because if we can give them a good deal and performance-wise it turns out great, we all benefit.”

So far it’s working. Since its inception, the government has advanced $9 million to the fund managers, who, along with their partners, have invested $37 million in five B.C. ventures, Tessier said. The province is hoping that the full $90-million investment will similarly lead to $450 million for B.C. companies.

“So the little bit we put in actually levers three to four times our capital commitment,” Tessier said.

The four new funds include two from Vancouver. Yaletown Venture Partners invests in early-stage IT and clean-tech companies, mainly in B.C., with some select investments in Alberta and the Pacific Northwest in the United States. In the fund’s nine-year history, it has invested in 13 companies, 10 of them in the province, co-founder and general partner Steve Hnatiuk said. It has also partnered with another Renaissance Capital Fund recipient: U.S.-based Arch Venture Partners.

The other Vancouver-based fund is Vanedge Capital, which invests in new media, interactive entertainment and related software. Rounding out the four is Tandem Capital, a Montreal-based $300-million late-stage diversified venture fund and Wales-based Wesley Clover, an early-stage fund that works closely with universities and research centres to commercialize technology in the IT communications sector.

fionaanderson@vancouversun.com