October 14, 2005 -- The Business Development Bank of Canada (BDC) announced today that it will invest $100 million in five new, independent seed and commercialization venture capital funds across Canada. The BDC expects to have the $100 million committed within 12 to 18 months.

The bank estimates that their seed technology investment group is already involved in roughly half of the current seed transactions in Canada. Companies looking for seed financing are usually at the idea phase. They may have a prototype, but they won't typically have revenues yet.

The BDC will invest $20 million per fund with a minimum fund size of $40 million. Entrepreneurs seeking seed financing will be able to approach the individual funds once they are established.

Investment criteria for venture capitalists interested in forming one of the new funds:

• Established management team with at least two principals with operational experience in an early stage technology company and not less than five years successful "pure" seed and commercialization technology investing experience;
• Funds and management teams must be wholly based in Canada and be completely independent of other organizations;
• Funds will make all initial investments in Canada in the commercialization of technology;
• Funds must have a detailed business plan setting out the fund's strategy and competitive advantage
• BDC must be able to play a significant role within the investor group;
• Co-investment rights;

A spokesperson for the bank says that the announcement has been very well received, with praise coming from both entrepreneurs and investors.

"This new BDC program should provide a very important boost to new investor groups seeking to enter the venture market for the first time. This is a very welcome development for the market, and I congratulate BDC on its initiative," said Rick Nathan, President of the Canadian Venture Capital Association.

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