Hey there, time traveller!
This article was published 19/12/2012 (1704 days ago), so information in it may no longer be current.
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."
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.