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It’s official, the Ontario’s Emerging Technologies Fund (ETF) is now open for business. This $250-million fund will co-invest into companies in high-growth sectors such as clean technology, life sciences and advanced health technology and digital media and information and communications technology. Co-investments are made along with qualified venture capital funds and other private investors. For more information see http://www.ocgc.gov.on.ca/
I am generally not a fan of public sector intervention in the private sector, but this comes as a positive move in contrast, since the government has wisely decided to let VCs and angels screen investments for the fund money instead of trying to do it itself. And frankly, after distorting the economy through massive subsidies to under-performing foreign car manufacturers, any public money directed towards innovative ventures is welcome. It also comes as somewhat of a relief to the Venture Capital industry in Canada, which is doing much worse than in the U.S. (yes that’s possible, apparently!), and is down to almost nothing according to this report by their association. Not that there was much in the first place!
The main question is whether there will be dollars to match. In other words, this program unlike, say, SR&ED, doesn’t make investments more attractive. It just makes it possible to invest in more companies. (more…)