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 documenturges the federal government to formulate a national plan andinfrastructure to finance early stage companies.
“Unless we take this opportunity to rethink Canada’s approach…we willnot have achieved much more than a short-term fix to the VC sector,perpetuating the classic ‘vicious circle’ within which both our VCindustry and tech sector industries are now trapped,” Matthews and CATAstated Tuesday in a news release.
Welsh-born Matthews founded orco-founded Ottawa tech firms MitelCorp., March Networks and Newbridge Networks, the latter of which wasbought by French telecom giant Alcatel SA for $7 billion in 2000. In1994, Matthews launched Celtic House Venture Partners, an Ottawa VCfirm that manages a combined portfolio worth $425 million across threeVC funds.
Among the blueprint’s key recommendations are suggestions about how thefederal government should dole out $400 million set aside for earlystage financing in the last federal budget:
-that Ottawa select a private VC firm to set up and manage a ‘funds offunds’ structure to “choose the best Canadian VC managers with which itshould invest the Crown monies”
-that the money would be invested in startups through the BusinessDevelopment Bank of Canada; BDC would place the money with top VC fundsacross Canada who would have to bid competitively for the rights toinvest it in startups
-that the Canadian government model its VC program after Isreal’s Yozmainitiative; set up by the Israeli government in 1993, Yozma saw 10 newVC funds established with each fund managing $20 million andcapitalized 40 per cent through government money and 60 per centthrough foreign investment; Yozma is credited with Israel’s rankingbehind Silicon Valley as the largest VC market in the world