CATA, Matthews want national VC program modelled after Israel's: VC strategy calls on BDC to team with private VC firms: $400 million promised for startup funding in the last budget.: ITBusiness Staff
Billionaire tech titan Sir Terry Matthews has teamed up with one of Canada's largest tech lobby groups to call for the creation of a national venture capital strategy.
Matthews, along with the Canadian Advanced Technology Alliance (CATA), released “A Venture Capital Blueprint for Canada” today. The document urges the federal government to formulate a national plan and infrastructure to finance early stage companies.
“Unless we take this opportunity to rethink Canada's approach…we will not have achieved much more than a short-term fix to the VC sector, perpetuating the classic ‘vicious circle' within which both our VC industry and tech sector industries are now trapped,” Matthews and CATA stated Tuesday in a news release.
Welsh-born Matthews founded or co-founded Ottawa tech firms Mitel Corp., March Networks and Newbridge Networks, the latter of which was bought by French telecom giant Alcatel SA for $7 billion in 2000. In 1994, Matthews launched Celtic House Venture Partners, an Ottawa VC firm that manages a combined portfolio worth $425 million across three VC funds.
Among the blueprint's key recommendations are suggestions about how the federal government should dole out$400 million set aside for early stage financing in the last federal budget:
-that Ottawa select a private VC firm to set up and manage a ‘funds of funds' structure to “choose the best Canadian VC managers with which it should invest the Crown monies”
-that the money would be invested in startups through the Business Development Bank of Canada; BDC would place the money with top VC funds across Canada who would have to bid competitively for the rights to invest it in startups
-that the Canadian government model its VC program after Isreal's Yozma initiative; set up by the Israeli government in 1993, Yozma saw 10 new VC funds established with each fund managing $20 million and capitalized 40 per cent through government money and 60 per cent through foreign investment; Yozma is credited with Israel's ranking behind Silicon Valley as the largest VC market in the world
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