Federal Government Calls For Applications for VCCI
The federal government, through the Business Development Bank of Canada (BDC), issued a call for proposals today for the Venture Capital Catalyst Initiative (VCCI). The VCCI is $400 million in federal government funding through the BDC and will complement support provided by other programs under the Innovation and Skills Plan to help grow Canada’s innovative high potential start-ups.
The announcement was made at an event held in Toronto at the offices of Hubba, a venture-capital backed Canadian technology computer software company in the retail technology space.
VCCI will make $400 million available through the Business Development Bank of Canada (BDC) to increase late-stage venture capital funding for Canadian firms looking to grow, expand and compete globally. Late-stage funding is financing required by an established firm to support product development or major capacity expansion.
VCCI will enable companies to hire additional talent, market-test new products, and expand to new markets in Canada and abroad. VCCI will also complement other programs under the Innovation and Skills Plan to help grow Canada’s most innovative firms, support greater diversity and address gender balance in the VC community.
Canada’s Minister of Innovation, Science and Economic Development, Navdeep Bains, the Leader of the Government in the House of Commons and Minister of Small Business and Tourism, Bardish Chagger, made the announcement which was emceed by Whitney Rockley, Co-founder and Managing Partner of venture-capital firm McRock Capital and the Chair of the Canadian Venture Capital and Private Equity Association (CVCA).
Announced in Budget 2017, The VCCI program is being implemented as a means of leveraging government funds with private sector investment and expertise. VCCI will use a competitive process to seek proposals from the private sector. To launch VCCI, the Government of Canada has announced this competitive call for proposals open to national and international applicants.
“Support through the VCCI program reinforces the importance the Government of Canada’s commitment to Canada’s innovation ecosystem,” said Mike Woollatt, CEO, CVCA. “This funding will be instrumental in propelling our country forward; bolstering our industry, and creating the jobs of the future.”
The announcement on December 18 officially kicks off the call for proposals for VCCI support. Successful candidates will be required to report on the gender balance of the fund managers and entrepreneurs they support. In addition, the government will establish a private sector selection committee to evaluate incoming proposals and provide recommendations on selections to the Deputy Minister of Innovation, Science and Economic Development Canada.
The deadline for expressions of interest is February 23, 2018. For full details and to apply – visit the ISED website here.
- $400 million managed through the BDC.
- Focus on addressing diversity and inclusion within Canadian VC fund managers emerged as an important new element of the program directed by the Prime Ministers Office.
- $350 million Fund-of-funds manager program to to leverage private capital ($2.25 for each VCCI dollar) that will ultimately be deployed into Canadian focused venture capital fund managers.
- Fund-of-funds managers can range in ultimate size from $150 million to $400 million each, injecting a total anticipated $1.5 billion into the venture capital ecosystem.
- Fund-of-funds managers must ensure 60% of total capital goes into Canadian venture capital managers and at least 35% must ultimately end up invested in Canadian companies.
- $50 million for “alternative investment” fund managers not typically considered by traditional Fund-of-funds managers aimed at identifying woman, cultural minorities and other under-represented groups in addition to other innovative models not captured by the Funds-of-funds.
- Deadline for Fund-of-Fund manager submissions is Feb 23, 2017 – Calls for expressions of interest
- Selections will be made in the spring by Minister Bains with input from a six-person industry expert selection committee that has yet to be selected.