HALIFAX - The three Maritime provinces are contributing $32.5 million to a new regional venture capital fund that will be privately managed.
Nova Scotia Premier Darrell Dexter said Tuesday the Build Ventures fund, based in Halifax, is aimed at helping companies that have had limited access to venture capital in the past.
"We're the furthest behind in Canada and Canada is well behind the United States, despite the fact that we have these extraordinary research institutions all around us," Dexter said.
"That's a tragedy as far as I'm concerned."
The new fund will focus on companies that are in their infancy, but they must also have an established business model and some revenue generation, he said.
Build Ventures will invest between $1 million and $5 million on each venture.
Dexter said Nova Scotia's Innovacorp — a Crown corporation — already provides venture capital to early stage companies, but the pool of public funds it draws from is too small.
"We noticed there was a real problem with early stage venture capital," he told an impromptu news conference inside a lab at the Innovacorp offices in Halifax.
"The opportunities were segmented and relatively small. There was no pool that was particularly focused on Atlantic Canada."
He said his government first floated the idea four years ago at a premiers conference. Newfoundland and Labrador have yet to invest in the fund, but Dexter said he's working on that.
The Build Ventures fund now stands at $48.5 million, with Nova Scotia and New Brunswick contributing $15 million each, and P.E.I. putting in $2.5 million.
Technology Venture Corp. of Moncton is contributing $5 million and BDC Venture Capital, an arm of the Crown-owned Business Development Bank of Canada, is contributing $10 million.
The fund will be managed by Patrick Keefe, who previously worked for Innovacorp, and Rob Barbara, an investment manager at Toronto-based Burgundy Asset Management.
They are investing $1 million in the fund.
Daniel Boyd, president of Halifax-based ABK Biomedical, said his fledgling company has already received $1.3 million in funding from Innovacorp and other sources, but it needs more money to move on.
"We're limited by what we can get done with smaller funds," he said.
"To penetrate the market we're after takes an awful lot of money ... This fund sits right there and gives up a no-excuses opportunity to go and nail it."
Boyd said his company is developing small beads, no bigger than a grain of sand, that can be injected into patients with tumours. The beads are designed to accumulate in the vessels that feed tumours, blocking blood flow and killing them.
The premier said the performance of the fund will be easily measured.
"The fund has all of the reporting mechanisms," he said. "It won't be hard to analyze in terms of their ... profit and loss statements."