Feds launch consultation on venture capital

The federal government wants to know how best to employ the $400 million it has earmarked in its Economic Action Plan 2012 to boost venture-capital investments in start-up companies. It wants Canadians' input on the financing needs of high-growth firms in Canada, the factors that influence private-sector participation in venture capital, and the role that governments can play in developing an environment that supports a sustainable private-sector-led venture capital market.

According to the Department of Finance press release,  the government is seeking to increase the capital and expertise available for growing, innovative firms while focusing resources on companies most likely to become global leaders.

Its discussion paper outlines the questions the government would like to see discussed during its consultation:

ï What are the key challenges facing high-growth firms in Canada in accessing the capital they need to innovate? What are the unique challenges confronting early- or late-stage companies?

ï What barriers do Canadian and international investors (e.g., financial institutions, pension funds, endowments) face in participating in venture-capital markets?

ï What models of venture-capital support should the government consider in order to encourage private-sector participation and investment? Should a priority be placed on attracting corporate strategic investors, foreign venture-capital participation or some other form of private-sector investment?

ï Does Canada have the right mix of large-scale and small-scale funds? Should a portion of public support target any particular stage of company development?

ï What criteria should the government consider in allocating the new resources to support venture capital in order to meet its objectives?

The government has appointed Samuel Duboc, a partner in private equity firm EdgeStone Capital Partners, as a special advisor on venture capital.