Manitoba names board members of provincial venture capital fund

Manitoba has named five people to the inaugural board of a provincial venture capital fund whose money its chair expects to start flowing next year.

The incoming board will lead the independent, professionally-managed fund as it partners with private sector capital to expand the money available for Manitoba-focused businesses, Premier Heather Stefanson said at a news conference on Monday.

"I want this announcement to be a clear signal: Manitoba is open for business and our government is taking concrete actions to make this province a more attractive place for new businesses to start, for existing businesses to grow and for foreign businesses to come and invest," Stefanson said.

"Today, our government takes a major step forward, creating hope and opportunity for young Manitobans who dream of creating and growing a business right here in Manitoba."

The board appointees include Mike Pyle, CEO of Exchange Income Corporation, who will serve as the board's chair, and Steve Kroft, president of Falcon Capital Corporation. The Business Council of Manitoba appointed both, the province said in a news release.

Pyle, who also represents the Business Council of Manitoba, said that organization has been lobbying the government to establish a provincial venture capital body since its inception nearly 25 years ago.

"Everyone knows that capital is the lifeblood of new companies, growing companies. And new and growing companies are how we create jobs, create tax base and make Manitoba an even greater place to live," Pyle said. 

He said he expects the fund's money to start flowing sometime next year.

Ray Bouchard, CEO of Enns Brothers, and Barb Gamey, chancellor of the University of Winnipeg, are also joining the board after being appointed by the Manitoba government, the release said.

The fifth board member is Marshall Ring, CEO of the Manitoba Technology Accelerator, an organization the province tasked earlier this year with managing the money earmarked for the venture capital fund on an interim basis.

Ring was appointed by the Manitoba Technology Accelerator, which was also responsible for creating a steering committee to establish the fund's initial governance structure.

"These directors collectively bring decades of capital markets experience in growing thriving businesses," Stefanson said.

"Through their respective careers, they have been responsible for the creation of thousands of jobs and hundreds of millions of dollars in economic activity, and they have done it all right from here, in this great province of ours."

Fund will reach $150M: premier

The announcement was held at Cerebra, a Winnipeg sleep research startup whose board chair, Brian Hayward, said the update was a welcome one.

Hayward said while Cerebra was able to leverage individual investments and take advantage of Manitoba's small business venture capital tax credit when it started, those kinds of initiatives "don't go the distance in creating the ecosystem" the business community is looking for.

"At the core of every vibrant entrepreneurial venture capital ecosystem is some mechanism for funding that has critical mass, and that's what this announcement today will do for our community," Hayward said.

The new board will take on managing the fund, including hiring professional fund managers and staff and developing investment approaches, policies, targets and strategies, Stefanson said.

The province pledged $50 million to establish the venture capital fund after first announcing its intention to create the fund in 2021. The government will keep supporting the fund until it reaches $150 million, Stefanson said.

Pyle said the initiative, which he called a "fund of funds," will put its money into funds with proven money managers — meaning it won't be involved directly in investing in any given company.

"We've sort of bent over backwards in how we've set this up to avoid us picking the winners and losers. That's not what we're doing," he said.

"Our job, as the board of this fund, is to pick successful, proven money managers who have their own money in it, and to lever that with our money."

Pyle said the money those managers put in also can't be less than what the provincial fund invests.

He said the provincial venture capital fund's money will also only be allocated to funds based in Manitoba, and will only be allowed to be invested in companies based in the province. 

The board will have its first meeting next week, Pyle said. Its first steps will be to establish a management team and put together criteria for expressions of interest. 

It will then evaluate the applications it gets and divide its money up among the qualified requests, Pyle said.