VANCOUVER – The British Columbia government is betting on the potential success of technology startups to boost job creation across the province.
Premier Christy Clark announced a $100-million venture capital fund to give early-stage tech entrepreneurs access to money that will help grow their businesses.
She said the money will address the difficulty entrepreneurs face when trying to bankroll their innovative but untested ideas.
“Tech tends not to be guaranteed bets,” Clark told a news conference on Tuesday.
“This seed fund is going to be proof that the British Columbia government has faith and confidence in our tech industry. It will allow us to attract a lot of investment from around the world that we hope would match it.”
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The BC Tech Fund is the first part of a three-pronged strategy by government to enhance the technology sector’s role in the government’s broad economic plan.
Provincially, the industry already employs 86,000 people, and their wages are 60 per cent higher than B.C.’s industrial average. The sector’s 9,000 companies added $13.9 billion to the gross domestic product in 2013.
It’s forecast to continue growing faster than the overall economy.
While Vancouver is the province’s largest tech hub, technology is the No. 1 industry in Victoria and already generating more than $1 billion in the Okanagan.
Now, the province says it wants to support entrepreneurs in transforming their startups into medium and large companies that can compete globally.
Technology Minister Amrik Virk said investing in the technology sector will not reduce the role that natural resources play in the economy.
“This is not an either/or equation, this is a symbiotic relationship,” he said. “It’s with tech that we have a cleaner, greener, more effective, more efficient natural resources sector.”
The last major bid to attract innovative companies that would potentially boost the economy was in 2008, with the $90 million BC Renaissance Capital Fund.
The new fund builds on the province’s current community of so-called angel investors, who provide startups with private funding.
The province must still hire a private-sector manager to administer the fund, which is planned for operation in 2016.
Clark said the government consulted widely within the industry and examined similar funding models around the world. The biggest lesson was not to put the fund in a civil servant’s hands.
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“You want to maximize the chance that an early investment is going to pay off big because you invested in a Mobify or a Facebook,” she said. “For a company that starts small and gets really big, you need to get experts.”
The announcement garnered support from dozens of the region’s high-profile tech entrepreneurs who gathered at the headquarters of Mobify, a growing mobile commerce firm that has already raised massive capital.
CEO Igor Faletski said the fund is significant enough to support a good number of B.C. companies.
“It definitely fills a funding gap and gives us more fuel to compete with our competitors in Silicon Valley, because they have unlimited capital,” he said.
The government plans to launch the remainder of its technology strategy when it hosts the first BC Tech Summit in January.