Labour-sponsored funds are taking new steps to accommodate entrepreneurs and enterprises with special financing challenges, including seedings and small dollar projects, micro-firms, and fledging technology companies. For instance, some funds are developing new equity pools and infrastructure for these investment priorities. In some instances, what is created are intermediary structures to which certain decisions about investments or related arrangements are delegated.
A version of this can be seen in the network of specialized funds of the Fonds de solidarité. In 1994, this network comprised nine funds initiated to serve chiefly innovative and growth sectors of the provincial economy, such as biotechnology, aerospace, producers of environmental goods and services, and other high technology industries. Some also exist for real estate and construction projects and for manufacturing industries derived from agriculture and forestry. These funds operate semi-autonomously — drawing on the advice of committees of industry experts, scientists, and academics, etc., established for those that are technology-intensive — and within an investment range of $50,000 to $500,000.
The Fonds de solidarité has enjoyed success with specialized funds. Consequently, they have proliferated — for example, Biocapital I of Laval, spawned Biocapital II — and, along with those designed to promote development in Québec regions and communities (see Section vi), have received ever larger resources. To illustrate, capital commitments to specialized funds were $98 million in 1995. Hence, these intermediary structures, which admit new financial actors and expertise to decision-making of the Fonds de solidarité, now rival direct investing as a mode of investment.
Recently, directors of the Fonds de solidarité decided to forgo initiation of more specialized funds and instead attend to development of those already in place. Two exceptions are the new $2 million Corporation Financière Brome which specializes in financing and management of accounts payable for investee firms and $2 million Fonds Transferts Technologiques which supports adaption of offshore innovation to Québec production.
Working Ventures has developed a similar vehicle in its Metro Ottawa Investment Venture (MOTIVE). Like the Québec funds, MOTIVE combines capital depth with financial and industrial expertise in the technology-intensive Ottawa Valley. With a $2.5 million commitment, Working Ventures hopes to strike deals beginning at $100,000 with local investors, including angels.
Another trend in this area is the emergence of specialized or sector-specific labour- sponsored funds, such as DGC Entertainment Ventures Corporation which invests in entertainment and communications industries; the Canadian Medical Discoveries Fund which finances early stage health sciences and technology projects; Capital Alliance Ventures which focuses on high technology industries residing primarily in eastern Ontario; and Sportfund which targets sports, fitness and related entertainment fields. In 1995, the Retrocomm Growth Fund joined this category. Capitalized partially by the pension money of union sponsors, this fund will promote environmental conservation and reuse by financing specific retrofit and construction activities that also create jobs for affiliated Ontario workers.