Alward pushes for Atlantic venture capital program

By Adam Huras – Telegraph Journal | link to original article

FREDERICTON – Premier David Alward says he expects that a newly struck regional venture capital fund will soon include investments from all four Atlantic provinces, and hopefully a contribution from the federal government.

New Brunswick pledged $15 million to the prospective investment fund earlier this month.

Nova Scotia set aside the same amount in April to aid the region's knowledge-based economy in dire need of capital to expand.

Alward said on Tuesday that discussions with Newfoundland and Labrador and Prince Edward Island were held at the Southeastern United States and Canadian Provinces Alliance meetings in Fredericton this week.

« Over the last couple of days we had a chance to talk to both provinces again and I certainly hope that in the coming months you will see both provinces come on board, » Alward said.

« It does make outstanding sense for our region and one of the things we learned over the last couple days is that we are a small region but we have tremendous potential and capacity.

« But one of the biggest issues our entrepreneurs face is a lack of access to capital. »

Both Alward and Nova Scotia Premier Darrell Dexter have discussed expanding the fund with federal colleagues in Ottawa.

Alward said companies in Atlantic Canada have suffered from limited access to venture capital in the past. The fund will invest in high potential companies that do not yet have the cash flow to secure financing from traditional lenders.

« These are high growth companies, there is risk involved as well and not everyone succeeds, » Alward said.

« The message we heard (from the alliance meetings) was that we still need to invest. »

Asked if government has to be prepared at times to fail in its investments, Alward said a greater number of successful decisions will come with the private sector at the helm without political influence.

« The New Brunswick Innovation Foundation was very strategic when it was formed and will continue to be strategic in the long term, » he said.

« The innovation foundation is really governed by the private sector, they are able to make strategic investment, yes there are taxpayer dollars that are used to held seed the foundation, but it allows it to work in the realm that it needs to work.

« We do need to be pragmatic, we do need to manage risk, but there is a role for it to play and it should not be based on political decisions, it should be based on sound business decisions. »

The regional venture capital investment fund will also be a privately operated fund.

Its details are yet to be finalized.

Calvin Milbury, CEO of the New Brunswick Innovation Foundation, said both his group and Innovacorp, a Nova Scotia Crown corporation, have been involved in the discussion surrounding the new fund.

He said the regional fund is a « shot in the arm » for companies in dire need of capital to expand.

The executive said a tentative plan has a two-tier system.

Provincial innovation foundations such as his will invest seed money in startups.

Once the fledgling companies have proven themselves, they will be recommended to the regional venture capital fund for money in order to stretch their wings.

This tiered system would considerably lower the risk to the regional fund, according to Milbury.