Charlottetown’s Startup Zone has entered into a partnership with Island Capital Partners to help early-stage businesses grow with access to capital and mentorship.
And, to help fund the partnership, the Atlantic Canada Opportunities Agency is providing a non-repayable contribution of $200,767, and the province is contributing $66,763.
“It’s just so important to have those sorts of supports for the new entrepreneurs (and) not have to struggle … and have the mentors to speak to directly,” said Shannon Pratt, interim CEO of Startup Zone, at Wednesday’s funding announcement.
The partnership will also provide resident companies at Startup Zone with on-site financial and business model support services.
“It’s just so important to have those sorts of supports for the new entrepreneurs (and) not have to struggle … and have the mentors to speak to directly.”
Alex MacBeath, CEO and managing director of Island Capital Partners, said the government funding will be used to cover operational costs for the venture capital fund so there is more capital available for investment opportunities.
“We want to stimulate and grow the pipeline of investible companies. So, we will identify and work with companies at a very early stage to help them get to the point of being an investible company,” said MacBeath, one of the fund’s five management team members.
“We will also then identify specific companies that we can invest in that we think have growth potential and provide a return to our investors … and work with those companies thoroughly to help them grow.”
ACOA provided a separate $269,500 repayable contribution with the province giving $221,000 to Startup Zone for operational support.
Startup Zone, a business incubator located at the corner of Queen and Water streets in Charlottetown, supports startup companies with resources and workspace. It opened in June of 2016 with financial support from ACOA and the province. Over that time, it has helped 34 resident companies with their businesses.
In April, Island Capital Partners and the province announced $2 million investments each into a $4-million angel investment fund to support early-stage Island businesses.
MacBeath said that in addition to providing access to “a pool of risk capital” and mentorship to early stage businesses, the group is an active investor, which includes sitting on the board of directors and receiving equity in a company.
“For early stage companies, access to capital is a critical piece of being able to grow. You can have the best idea in the world, but if you don’t have the capital to make that happen, then your chances of success are much more limited,” he said.