Angel fund will support entrepreneurs, spur economic growth
A new $4 million angel investment fund will help jump-start local businesses at a phase of their development when they need it the most and help drive economic growth and prosperity for Prince Edward Island.
As part of the 2017-2018 provincial budget introduced earlier this month, the provincial government announced $2 million towards a new Angel Investment Fund. This investment will match another $2 million in private funds being raised by Island Capital Partners - a group of seasoned business people living on the Island.
“Our Island entrepreneurs are known for their hard work, creativity and perseverance in bringing new ideas and new products to market. We want to support them in moving from their idea, product or service, to market,” said Economic Development and Tourism Minister Heath MacDonald. “This new fund is a very important addition to the various supports we provide entrepreneurs because it shows how mighty Prince Edward Island can be when the private sector and government work together to help our start-ups succeed.”
The province’s investment will join private sector capital and expertise to help new and expanding businesses grow to their full potential. The new fund will assist entrepreneurs who are preparing to move from conceptualization to commercialization of a new product or service.
Island Capital Partners will be managed by a four-member general partner team:
- Ron Keefe, the former CEO of Bio-Vectra and Diagnostic Chemicals;
- Alex MacBeath, the former CEO of Grant Thornton Canada;
- Steve Nicolle, a former CEO at several technology start-ups; and
- Paul Lypaczewski, a former executive with several software companies.
“Island Capital Partners sees tremendous potential for growth and success for early stage companies in the current economic climate on Prince Edward Island,” Alex MacBeath said “The entrepreneurial spirit shown by local businesses and start ups combined with their enthusiasm, imagination, and work ethic give our group a great deal of optimism for the future. We look forward to working with the province to see our shared goals achieved.”
“The province is focused on growing the economy, expanding exports, and helping Islanders find meaningful employment,” Minister MacDonald said. “While this new fund will indeed provide financial support to start-up companies, perhaps the most important feature is the extensive expertise and experience of the four-member management team. They will use their years of business experience to help foster and guide enterprises in which they invest as they prepare to grow and scale their companies.”
In addition, accredited investors will have the opportunity to make additional investments alongside the fund.
The fund adds another component to the support ecosystem for small and medium sized businesses in the province. It compliments other provincial supports such as the micro loans government financing supports, development and commercialization funding, the Start Up Zone, the Ignition Fund, and various other supports provided to up and coming entrepreneurs.
Fund investments / operations
• Investment decisions will be made by the General Partner’s management team.
• Pool of capital will be minimum $4M, comprised as follows:
- $2M – private angel investors
- $2M – provincial portion
In addition to the pool of capital itself, individual angels will be permitted / invited to invest alongside the pool of capital.
- Angels who have invested in fund also have opportunity to invest alongside the fund
- Angels who have not invested in fund can receive pitch documents and the opportunity to invest as an individual.
For example, if a decision was made to invest $400,000 in a company, the sources of the funds could be:
- $300,000 from ICP Fund (funded 50/50 by IIDI & individual investors in the pool);
- $100,000 from individual angels independent of the pool.
• Investment criteria will include:
- Investment size - $150-$500k. May be the lead investor or may participate in a larger initial round of financing;
- Local – Canadian companies headquartered on PEI;
- Growth potential - $10+ million in potential worldwide sales;
- Sector neutral but recognizes that some sectors have greater potential
Department of Economic Development and Tourism