Regional initiative funds throughout Québec
Working Group report on the role of the Québec government in venture capital
Québec, December 17, 2003 - Mr. Pierre Brunet, chair of the Working Group mandated by Québec minister of economic and regional development Michel Audet to look into the Québec government’s role in venture capital, explained today in a press conference that “the government must make more room for the private sector in all regions of Québec, and give regional business communities more control over their own development.” The authors of the report found that the private sector is not very active in the regions due to the high levels of risk involved, the elevated transaction costs, and especially the prevalence of public players.
Companies in the startup stage and those involved in smaller scale projects also need a flexible, tailored financing tool to properly meet their needs. The Working Group therefore recommends the creation of regional initiative funds (RIFs) in all regions of Québec.
Each RIF would have a minimum $3 million budget made up of a mixture of public and private capital ($2 from the public sector for every $1 from the private sector). These funds would be used as a general way to finance new and existing companies and small projects in many fields. Each project would be eligible for a maximum contribution of $300,000.
“Regional business communities would be responsible for managing these funds, because they, more than anyone else, are the most familiar with the industrial fabric of their particular regions. What’s more, they have the contact networks necessary to foster the emergence of profitable projects and oversee companies as they develop,” stressed Mr. Brunet.
“The regions should be happy about this recommendation because these funds will give them considerable leverage in maintaining their vitality, and autonomy, and economic prosperity. When it comes to business financing, the public sector should play more of a complementary role in regions whose own resources and natural strengths, and particularly whose own business communities, are capable of stepping into the breach,” concluded Mr. Brunet.
For more information on these funds and other Working Group recommendations, consult the WORKING GROUP REPORT ON THE ROLE OF THE QUÉBEC GOVERNMENT IN VENTURE CAPITAL at the following address: www.mder.gouv.qc.ca/accueil.html.
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Chair, Working Group