As a rule, the fund is not interested in assuming majority voting shares in an enterprise. Temporary control situations may be desirable, on occasion, in the case of buyouts by worker or manager groups or if an investee firm is financially troubled and could benefit from a cash infusion.
The fund moves through the same market avenues as other venture capital institutions for identifying potential deals. As a sizeable equity investor, Working Ventures is capable of leveraging financial syndication, however, it is also prepared to follow others into co-investment. Of the fund's current portfolio projects, over one quarter reflect co-investment. An illustration is the Saskatchewan-based Biostar, the investment in which is shared between Working Ventures and seven other institutions, such as MDS Health Ventures, Inc., supporting the firm's concentation on biotechnology.
A substantial flow of deal referrals also comes from CFL affiliated unions and members and from the clients of commissioned investment dealers and brokers. It is estimated that Working Ventures receives and processes around 1,000 financing requests and proposals yearly from entrepreneurs and enterprises across Canada.
Another source of investment is a new pool of equity established by Working Ventures. In 1994, the fund joined with the Ottawa Carleton Economic Development Corporation to create a regional pool called the Metro Ottawa Investment Venture (MOTIVE). Under MOTIVE, the fund allocates $2.5 million for investments ranging from $100,000 to $750,000 while utilizing local infrastructure and experience to identify deals and co-investors.
Like the Fonds de solidarité, Working Ventures is developing and extending a network of MOTIVE-like funds. The second pool has been established in Prince Edward Island and has Working Ventures co-investing with local investors, including angels. The national fund will contribute to one-half of every investment made through this mechanism.
Working Ventures has not yet established investment support services comparable to those of the Fonds de solidarité. Fund officers intend to develop programs for improving corporate governance, financial accounting procedures, and human resource management in its investee firms, however, in the near future.
Working Ventures made its first investment of $1.5 million in Mercury Graphics Corporation, a commercial printing firm of Saskatoon, Saskatchewan, in October, 1992. Since then, the investment portfolio has advanced significantly, despite some legislative and regulatory hurdles. In 1994, the fund began investing at a rate of $5 - $10 million per month. Towards the end of 1995, the cumulative portfolio comprised 52 deals valued at $133.4 million. At current growth rates, investment activity is projected to reach or surpass $150 million by the beginning of 1996.