On May 3, 2013, the Honourable Jim Flaherty, Minister of
Finance, announced a next step in implementing the Harper
government's Venture Capital Action Plan (the
"VCAP"), as part of its 2012 and 2013
Economic Action Plan. In January 2013, Prime Minister Stephen
Harper announced the VCAP, which includes resources for
establishing and recapitalizing large, private sector-led funds of
funds. A fund of funds portfolio is made up of investment in a
number of venture capital funds.1 The important next
step in implementing the VCAP involves the launching of a selection
process for General Partners and Managers to manage the fund of
funds and a process for selecting high-performing venture capital
The Selection Process
i) General Partners and Managers
Those parties interested in acting as a General Partner and
Manager are invited to submit their candidacy to manage a fund of
funds established or recapitalized through the VCAP. Interested
parties should submit an expression of interest by June 3, 2013.
The selected candidate will invest and manage total committed
capital between $300 and $400 million for each fund of funds and
should have experience managing funds of funds, venture capital
funds or a similar vehicle. Candidates should have or be prepared
to establish a substantial presence in Canada.
ii) High-performing venture capital funds
High-performing venture capital funds looking for potential
investment from the federal government through the VCAP are also
invited to submit expressions of interest by May 27, 2013.
According to the May 3, 2013 announcement, "high-performing
funds are expected to be broadly focused on key growth sectors
where Canada can be competitive globally, have already or are
expected to shortly hold a 'first closing', and have a
substantial presence in Canada."2
To assist in the selection processes for General Partners,
Managers and high-performing venture capital funds, the federal
government is planning to announce a private sector advisory panel
in the coming weeks.
Moving to create the VCAP is an important step in stimulating
Canada's knowledge economy. In a Conference Board of Canada
report released on April 4, 2013, Canada was ranked second-to-last
among its peers in venture capital investment and business R&D
spending. With the implementation of the VCAP, time will tell
whether we will see an improvement from Canada's "D"
rating on investment capital spending.
The federal government's announcement can be found here.
More details regarding the expressions of interest for general
partners, managers high-performing venture capital funds and can be
found here and here.
1. These investments are made by a General Partner and
Manager on behalf of investors participating in the fund of
2. Department of Finance, "Canada's Venture
Capital Action Plan: A Step Closer to Helping Innovators Grow and
Create Jobs", May 3, 2013.
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