Saskatchewan launches $50-million early-stage fund aligned with new angel network

The Saskatchewan government has unveiled a $50-million public-private early-stage fund to help existing firms expand and make provincial start-ups more attractive to investors. The Saskatchewan Entrepreneurial Fund (SEF) is receiving $25 million over five years from the government’s Crown Investments Corp (CIC) and a matching amount from Sask Central, an organization representing the province’s credit unions.

With $1.8 million in operating capital from CIC, SEF will be overseen by the Entrepreneurial Foundation of Saskat-chewan (EFS), which is located in Saskatoon’s Innovation Place. The EFS and its board of directors will approve all applications for funding. Successful firms will be provided with mentoring and support services before being directed to the Fund.

So far, each of the funding partners have provided $5 million to the fund, with the balance flowing in tranches over the initial five-year period.

“The Fund will play a really important role in the funding gap between $150,000 and $1 million of investment,” says Doug Gill, managing director of the Univ of Saskatchewan’s industry liaison office and an EFS board member. “It will look for a good business plan and a clear time to placing a product in the market.”

Since its announcement last month, the EFS has been developing its focus and strategy and will soon be assembling a team to evaluate the many deals that have already been submitted. The first batch of companies should be selected by the end of March with initial awards made after they have been deemed investor-ready.

“We are the gatekeeper to the Fund and advocate for the companies by increasing their value and lowering risk,” says inaugural CEO Ben Voss. “Early stage companies usually fail because they have too much risk. We give them the tools to succeed and increase the chances of a greater return for the Fund.”

While the Fund is technically focused on early-stage firms, it will not be considering firms that have yet to write a business plan or complete proof-of-principle or prototype development. Under Voss’ leadership, the Foundation is developing ties to other funding organizations to give firms more options once they are ready to seek the next stage of financing. Among the organizations aligning with the Fund are the Industrial Research Assistance Program and the new Saskatchewan Angel Investor Network (SAINT). Facilitated by the Saskatchewan Advanced Technology Association (SATA), SAINT has already received expressions of interest from about 30 angels and will consider companies from the idea stage onward.

“A steering committee provides advice to the network and qualifies all entrepreneurs,” says Greg Sutton, SATA’s executive director. “We then leave it up to the angels whether they want to invest or not.

Sutton says SAINT and the new Fund will make a huge difference for entrepreneurs seeking initial funding.

“About 80% of technology companies in Saskatchewan are self-financed,” he says. “SAINT fits with the new foundation as a pool of funds it can direct people towards. It’s another financing option.”

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