Company Logo Tuesday, July 19, 2005

Venture fund to invest in local tech firms


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Tech Capital Partners of Waterloo has more than doubled the investment capital it manages with the launch of a second venture-capital fund that will be used to finance local technology companies.

The initial round of the new Tech Capital II fund attracted $50 million from institutional investors, the company said. It brings the total amount of money under management by Tech Capital Partners to $85 million.

The new fund will be invested in early-stage companies in Waterloo Region area, giving a significant boost to the local tech industry, said Tim Jackson, a founding partner at Tech Capital.

"It's $50 million that will go to paying salaries, pay for research and development in this region, and hopefully it's going to be part of continuing the growth that we're seeing here in Waterloo Region," he said.

Based on Tech Capital's experience with its existing fund, the new $50-million fund could attract an additional $200 million in the form of co-investments in local companies made by other investors, Jackson said.

The new fund attracted several prominent institutional investors, including the Business Development Bank of Canada (BDC), the Ontario Municipal Employees Retirement System (OMERS) and Toronto-based Edgestone Capital Partners, among others.

"I think it shows that people . . . are recognizing this region as one of the leading places to invest in technology in the country," Jackson said.

"It's a huge endorsement of what we as a community are doing. These are some of the biggest fund investors in the country who have chosen to invest directly in this region."

The task of attracting such prominent investors was made easier by the wealth of local infrastructure that supports the region's high-tech community, Jackson said. This includes two local universities and a community college; world-renowned research institutes; and support networks such as the Communitech Technology Association and the Watstart website that provides information and discussion groups for startup companies.

Tech Capital Partners was founded in 2001 by Jackson and his partner Andrew Abouchar.

In addition to the fund announced yesterday, their company manages the $30-million Waterloo Tech Capital fund. It also manages the $5-million WaterlooVentures fund, which is wholly owned by GrowthWorks of Vancouver.

Tech Capital provides financing and business-development services to technology entrepreneurs who are at an early stage of starting a company.

Likely candidates include scientists, professors and engineers who have a unique technology that's "going to change the world," Jackson said.

"We want to be the first investor in and we want to become their partner and help them build a business."

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