NBIF To Focus More on Scaling
by Peter Moreira | Entrevestor
The New Brunswick Innovation Foundation is changing its investment philosophy to place a greater emphasis on growth-stage companies.
The province’s innovation agency hosted a seminar at the Venn Centre in Moncton on Tuesday at which it unveiled the new thinking on funding. The foundation’s mandate for making venture capital investments is largely staying the same – it will continue to make about 10 early-stage investments each year. But it wants to take a more proactive role in working with companies that are seeking multi-million-dollar financing rounds.
NBIF Investment Analyst Raymond Fitzpatrick said the group up to now has had a “soft ceiling” of $1 million in investing in any one company. It would also participate in follow-on rounds as long as the company found an independent investor to lead the round.
Though it still wants other funds to be the main investor in a large round, the foundation is now more interested in initiating such rounds, possibly writing the term sheet to draw interest from other investors. In certain cases, when a startup has hit or exceeded all its milestones, NBIF may exceed its $1 million ceiling as long as there are other funds making large investments.
“We’re not happy with companies just getting going – we really want those companies to scale up,” said Fitzpatrick. “We’re going to take our best-performing companies and we’re going to step up first. One million [dollars in total investment] is good. Three million is better. Five million – now you’re talking.”
He said NBIF intends to invest $4.8 million in each of the next two fiscal years. The fund invested $4.2 million in 2014-15, the most recent data available.
As well as a more assertive investment policy, NBIF is also going to work with its 40 to 50 portfolio companies and other New Brunswick startups to encourage them to focus on all aspects of scaling.
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