Emerging Technology Fund
John Marshall, the head of Ontario’s newly created Emerging Technology Fund, came to Ottawa in early May to visit various stakeholders who have a keen interest in ensuring start-ups and emerging technology companies receive the assistance they have long needed since the demise of labour sponsored venture funds several years ago. The good news is the Ontario government has recognized that their assistance is essential to reseed venture capital in Ontario. Based on that meeting, here is my view of what we may see:
The $250 million Fund will be invested over a five year period commencing July 2009, with a focus on ICT/Digital, Cleantech/Green and Life Sciences. The Fund is not focused on any particular stage, and as a result I suspect we will see anything from start up to pre- IPO investments. Do not expect this Fund to lead any deals. One can also expect that they will invest on the basis that they intend to participate on follow on investments in investee companies.
Expect the Fund to co-invest with so called ‘qualified investors’ which is a concept they are currently defining. I would expect that the qualified lead investor will have to put forward a term sheet upon which the Fund will be asked to co-invest. One would expect such investors will be long standing venture capitalists and possibly angel organizations.
John and his team are also working on the eligibility concepts, but we expect some Ontario-investment focus, and they may even crib the labour sponsored venture definitions that we’ve been used to working with over the past decade or so.
The Fund is not likely to seek any board seats, although they may request observer status and the usual financial documentation and inspection rights. The Fund will likely hire staff, but as of the date of our meeting we don’t believe any advertisements had yet been placed for such positions.
We all hope they really do launch on a timely basis, and we hope it makes a genuine impact. As we know this is desperately needed.
Debbie Weinstein, LaBarge Weinstein