The federal government kicked off its call for proposals for the country’s newly launched $400-million Venture Capital Catalyst Initiative—with a new kind of criteria.
Through the Business Development Bank of Canada, the new fund requires candidates to show how they’ll use the funding to work towards gender balance of the fund managers and entrepreneurs they support.
The initiative—VCCI for short—is divided into two streams for venture capital fund managers. A $350 million pool is allocated for applications from private sector-led funds-of-funds; applications that should address emerging issues, including supporting diverse and women fund managers.
The remaining $50 million will be dedicated to businesses that “challenge conventional practices,” said Minister Small Business Minister Bardish Chagger, those supporting underserved groups like women-run businesses and Indigenous or immigrant entrepreneurs.
At an announcement at Hubba’s Toronto headquarters, Chagger said Canada must “move beyond balance sheets” to modernize models.
“We do not want to simply reheat old ideas. We want to improve on past initiatives. An important consideration we heard from Canadians was the need for diversity,” said Chagger at the announcement. “Diversity of ideas, perspective, experiences and, yes, of gender.
Innovation, Science and Economic Development Minister Navdeep Bains said the new initiative is an essential pillar of the federal Innovation and Skills Plan. The focus on enhancing diversity and addressing gender balance is apart of a national movement to close the gender gap in Canada’s business and technology sectors.
“Innovation needs all hands on deck. We need diversity of opinion and thought,” said Bains. “This isn’t a slogan… This is a value proposition… It’s about investing in diversity.”
The fund will be managed by BDC, Canada’s most active venture capital investor, and VCCI will match “at minimum” every dollar of government funding, said Bains. By investing alongside the private sector, Bains said VCCI could inject around $1.5 billion into Canada’s innovation capital market.
“In 2016, we saw the most venture capital invested since 2001 and we are on track to exceed that,” he said. “The need for funding to fuel growth is essential… It will create conditions for companies to succeed, scale up and be globally competitive.”
Although VCCI was initially announced in the government’s 2017 budget, Bains and Chagger co-launched the initative’s expressions of interest today with BDC president Michael Denham and Liberal MP Adam Vaughan. The government is asking applicants to submit proposals by February 23, 2018.