Local

Winnipeg Free Press - PRINT EDITION

Chamber pitches startup fund for entrepreneurs

By: Geoff Kirbyson

Posted: 12/20/2012 1:00 AM | Comments: 0

John Woods / Winnipeg Free Press Archives Dave Angus: money needed to �launch new enterprises.� (JOHN WOODS)

THE Winnipeg Chamber of Commerce is looking to the province to help startup companies get off the ground.

The pro-business lobby group has proposed the province establish an annual $30-million "startup capital fund" that would provide entrepreneurs with infusions up to $500,000 -- provided they put up $100,000 of their own money -- and manage their progress through government-licensed incubators, such as The Eureka Project and Biomedical Commercialization Canada.

"We want Winnipeg to the be the entrepreneurial capital of Canada," Angus said. "We need tools like this to be able to launch new enterprises. There's a big void in Manitoba in terms of the availability of startup capital."

Without such a fund, Angus said entrepreneurs will continue to rely on "friends, family and fools," as well as their own savings for much-needed capital.

The impetus for the fund idea came from a chamber-sponsored trade mission to Israel earlier this year. Angus said this kind of fund is one of the reasons Israel has become a world leader in innovation.

The Israeli fund doles out $50 million annually, Angus said. Almost all of its recipients are successful enough to pay back the $500,000 they receive. (They also need to have $200,000 of their own capital.)

"We would expect the same thing here. Entrepreneurs would need to have some skin in the game," he said.

It would be highly unlikely the fund would get the full $30 million back every year -- not every business will shoot to the moon -- but any shortfalls could be more than offset by increases in income tax and PST revenues from successful enterprises, Angus said.

"The idea is to try to prime the pump at the early stage to have more and more companies becoming viable in Manitoba," Angus said.

Peter Bjornson, minister of entrepreneurship, training and trade, said the province is always looking at ways to support the chamber and city businesses. But considering the province's financial situation, government coffers aren't exactly overflowing.

"We're in very uncertain economic times. Certainly there is merit to the (chamber's) proposal. We'll have to work together and see if there's a made-in-Manitoba solution," he said.

Angus said the chamber's proposal bears no resemblance to the now-defunct Crocus Investment Fund.

"(What we're proposing) isn't a labour-sponsored fund and it wouldn't be going to the public," Angus said.

"It's to help startup companies get to the stage where they can be viable businesses and employ Manitobans. This is an area where government needs to play a role. You won't get (angel investors) to invest at that point."

geoff.kirbyson@freepress.mb.ca

How capital fund would help firms

Start me up: How a proposed $30-million annual capital fund could work for local and relocated startup companies.

Funding up to $500,000 per enterprise along with a $100,000 investment by the entrepreneur.

Managed through government-licensed incubators that will ensure certain milestones are achieved by the entrepreneur for money to continue to flow.

Money could be made available through repayable loans so government will share in the success of the enterprise.

Funding should be made available right through to the commercialization stage. A clear definition of the difference between commercialization and innovation/research should be developed to ensure that investment made to commercialize can be properly assessed.

Republished from the Winnipeg Free Press print edition December 20, 2012 A6

Fact Check

Have you found an error, or know of something we’ve missed in one of our stories? Please use the form below and let us know.

* Required

In which story did you find the error? *
Please post the headline of the story or the title of the video with the error.
What was the error? *
Please post exactly what was wrong with the story.
What should we have written?
Please indicate your source for the correct information.
Who else should we interview to improve this story?
Please include any contact information you may have.
Can we contact you in the future for advice on stories about this topic?
Yes

No
First Name: *
Last Name: *
E–mail Address: *
This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.
Phone: *
This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.
Colour:
Are you blue? If you can see this, leave it blank and get some CSS support.
Enter the words that you see: * This is to prevent our forms from being filled out automatically.
You have failed to correctly identify the words in the box above. Please try again.

More Local

Undock

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is register and/or login and you can join the conversation and give your feedback.

Have Your Say

New to commenting? Check out our Frequently Asked Questions.

The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010.