Do you have a big idea? Want to build a tech start-up but lacking the resources to do it? The #BCTECH Strategy is your ticket to opportunity. With $100M invested in tech venture capital, there are more resources than ever available to entrepreneurs, http://ow.ly/V279o
The Province of British Columbia is creating a $100-million venture capital fund as it builds the foundation for a comprehensive technology strategy aimed at stimulating growth in the fast-moving sector, creating jobs and strengthening a diverse economy.
Premier Christy Clark today announced the new BC Tech Fund as part of the first of three economy-building pillars in the B.C. government’s multi-year #BCTECH Strategy that will drive growth and job creation in the multi-billion dollar tech sector.
“B.C.’s technology sector is consistently growing faster than the overall economy making this the perfect time to catch the wave and help smaller companies join in the ranks of economy builders,” said Premier Clark. “With this fund we’re creating a stronger foundation for B.C.’s technology sector, which is a major employer in communities across the province, to shine on the global stage while creating well-paying jobs back at home for British Columbians.”
The BC Tech Fund will help promising tech companies in B.C.’s tech sector by creating an avenue for capital funding, enabling them to take the next step towards joining the ranks of other job-creating tech companies.
The new fund will also help develop a sustainable venture capital system in the province, building on the success of the B.C. Renaissance Capital Fund (BCRCF), the province’s well developed Angel investment community, and responding to current funding needs.
Capital is one of three pillars in the forthcoming #BCTECH Strategy. This first pillar, announced today, also includes continuing to support B.C.'s competitive tax system and research environment.
The remaining two pillars, talent and markets, include actions to deepen the B.C. technology talent pool by developing and attracting the highest quality talent, and actions to make it easier to access new markets. The complete #BCTECH Strategy will be announced in January.
The BC Tech Fund will be in operation in 2016 following an open procurement process to secure a private sector fund manager to administer it. The process for identifying a fund manager begins today with a posting for a Negotiated Request for Proposal (NRFP).
B.C.’s technology sector, a key pillar of the BC Jobs Plan, is consistently growing faster than the economy overall. Its continued growth is integral to diversifying the Province’s economy, strengthening B.C.’s business landscape, and creating jobs in B.C. communities. The BC Jobs Plan builds on the strengths of B.C.'s key sectors and its educated and skilled workforce, keeping the province diverse, strong and growing.
In partnership with the BC Innovation Council, the province is hosting B.C.’s first #BCTECH Summit, Jan. 18-19, 2016, where the #BCTECH Strategy will be released in full. The summit will showcase our tech industry and offer opportunities to connect to this growing sector. To register or learn more, go to: http://bctechsummit.ca/
Amrik Virk, Minister of Technology, Innovation and Citizens’ Services –
“We’ve seen phenomenal growth in the technology sector in recent years. The B.C. Tech Strategy will further increase that growth by giving early-stage companies greater access to the venture capital they need to start off their business on the right footing. The access to capital is the boost entrepreneurs need to build their companies, commercialize and create high-paying, skilled jobs.”
Teresa Wat, Minister of International Trade and Minister Responsible for Asia Pacific Strategy and Multiculturalism –
“Venture capital is a critical building block to stimulating innovative ideas in the marketplace and this new fund reflects our commitment to creating an investment environment that stimulates new economic growth.”
Shirley Bond, Minister of Jobs, Tourism and Skills Training and Responsible for Labour –
“The technology sector is one of eight key sectors identified in the BC Jobs Plan and it is a crucial job creator, supporting innovation and productivity across all industries. All British Columbians stand to benefit from the sector fulfilling its potential.”
Greg Peet, chair, Premier’s Technology Council –
“Government gained a better understanding of what was needed to support growth of the technology sector by speaking with its leaders and influencers. Putting those needs into action has resulted in a strategy that provides promising tech companies with access to the capital they need, and reaffirms government's commitment to help researchers and innovators succeed in building world class new businesses that create high paying jobs in B.C.”
Bill Tam, president and CEO of the BC Technology Industry Association –
“B.C. is already home to an amazing technology sector, and today's announcement provides needed support for business development and growth. Government's venture capital investment is a great start in terms of helping companies expand, and will solidify what many already know: B.C. is the best place to grow a tech company.”
Igor Faletski, chief executive officer, co-founder, Mobify –
“Increasing access to venture capital in British Columbia will be a major boost to many growing technology companies here. At Mobify we know from personal experience how useful early stage programs like the BC Venture Acceleration Program are to startups. The $100 million investment by the B.C. government into the BC Tech Fund will help our companies grow and achieve global leadership even faster.”
Mike Woollatt, chief executive officer, Canadian Venture Capital and Private Equity Association –
“Like B.C., governments around the world recognize that being a strong partner of the venture community reaps rewards for the economy and productivity. This new venture capital fund will be a source of innovations and jobs.”
Paris Gaudet, executive director, Innovation Island –
“Working closely with tech startups delivering the Venture Acceleration Program, I know how venture capital significantly increases a company’s chance of success. That is why I’m thrilled about this announcement as it will propel growth, increase jobs in the tech sector, and expand the number of opportunities available to entrepreneurs.”
- The technology sector directly employs more than 86,000 people, and wages for those jobs are 60% higher than B.C.’s industrial average.
- B.C.’s technology sector is growing faster than the overall economy. In 2013, it grew at a rate of 4.7%, higher than the 3.2% growth observed in the provincial economy.
- In 2013, the technology sector added $13.9 billion to B.C.’s GDP.
- B.C.’s 9,000 technology companies combined generated $23.3 billion in revenue in 2013.
- New technology companies are emerging at increasing rates throughout the province. In 2013, there was an addition of more than 700 new technology companies in B.C., an increase of 8% over the prior year.
#BCTECH Strategy: www.bctechstrategy.ca
For live web casts, photos/videos and more info on the #BCTECH Strategy, visit https://news.gov.bc.ca/stories/bctech-strategy
Premier’s Technology Council: www.gov.bc.ca/premier/technology_council
BC Technology Industry Association: www.bctia.org/
BC Innovation Council: www.bcic.ca
Canadian Venture Capital and Private Equity Association: www.cvca.ca/
Innovation Island: www.innovationisland.ca/
For information on Notice for Request for Proposal:
BC Bid: www.bcbid.gov.bc.ca/open.dll/welcome
Name of Document: Venture Capital Investment Fund Management
Opportunity Number: ON-002758
Contact: Tracy Harris email@example.com
How Venture Capital Works (illustration): https://flic.kr/p/BJZnhD
A backgrounder follows.
Sam OliphantPress Secretary
Office of the Premier
Joanne WhittierCommunications Manager
Ministry of Technology, Innovation and Citizens’ Services
Kieran LawlerDirector of Communications, Canadian Venture Capital and Private Equity Association
Direct: 416 487-0519 x204
Mobile: 416 303-0799
Improve Access to Capital and Continue to Support our Competitive Tax System and Research Environment
Investing in a New Venture Capital Fund
- $100-million investment to expand the availability of venture capital in B.C. and address the early stage (A-round) funding gap (though we also recognize the need for access to capital at later stages for continued company growth).
Continue our competitive tax rates and credits
- Increase the number of B.C. technology companies claiming the Digital Animation or Visual Effects (DAVE) credit or the Interactive Digital Media Tax Credit (IDMTC).
- Continue B.C.’s Small Business Venture Capital Act which provides $33M of tax credits annually.
Continue to Build a Strong Research Environment in B.C.
- Genome BC will continue to facilitate turning important insights from genomics into new diagnostic and treatment services.
- Attract and keep top research talent in B.C. to generate the development and application of new ideas in areas of key importance to the health system through funding to The Michael Smith Foundation for Health Research (MSFHR).
- Revised the B.C. Knowledge Development Fund criteria to focus on provincial government priorities.
- Provide funding to post-secondary institutions to increase commercialization potential.
What is Venture Capital?
Venture capital is a key vehicle through which technology companies, particularly those that are small- and medium-sized, acquire funding needed to grow their business.
Venture capital funding is money invested into a company (primarily in the technology sector) that helps its growth through the seed, early stage, and subsequent growth stages, and typically seeks a return on this investment through an initial public offering or sale of the company.
It is an essential mechanism for growth in the technology sector – providing funding plus mentorship and international connections.
How does it work?
Millions of people around the world watch venture capitalists at work when they tune into the popular television show Dragon’s Den, which features a panel of venture capitalists judging the pitches of small businesses asking for an injection of money to grow their businesses.
Although cameras may not be rolling for many small businesses needing investments to make their small operations bigger, their reality is not far from the one on television and could look like this:
- An entrepreneur with an innovative idea starts out by getting some seed funding from family, friends and their own savings to build a prototype and see if their idea works.
- From there, they often seek angel investment in the range of $200,000 to $2 million or more from high net worth individuals to develop their business plans and activities.
- They then seek venture capital financing in rounds to fuel rapid business growth; for example early-stage (A-round) and then subsequent larger financing rounds B, C, etc. to expand markets and grow revenue, which increases the value of the company.
- This all culminates in a return on investment through an initial public offering or sale of the company.
Examples of B.C. companies assisted by venture capital include D-Wave Systems, Avigilon, BuildDirect, Absolute Software, Hootsuite, Rackforce Networks, Recon Instruments, and Vision Critical.
Examples of major international companies that benefitted from venture capital during their earlier stages include Apple, Microsoft, Amazon, eBay, Cisco and FedEx.
Why is it important?
Without capital, many entrepreneurs with great ideas and technology would never succeed. The growth of B.C.’s small and medium-sized technology companies is particularly dependent on venture capital.
The technology sector is critical to a diverse and innovative B.C. economy. It employs more than 86,000 British Columbians, contributed $13.9 billion to provincial GDP in 2013 and is growing quickly.
Why is B.C. creating a new VC fund?
Following a lengthy review of its venture capital policy the Province determined it has a significant role to play in ensuring a sustainable venture capital system that supports job creation, economic diversification and competitiveness.
In particular, the review found that many companies at the angel investment stage in B.C. could not find funding for the next stage – called early stage or A-round – to fuel their growth to the next stage.