PEI Investment Fund launches: finance & mentorship offered to entrepreneurial ventures

A new $4-million investment fund for Prince Edward Island has launched. Island Capital Partners, as the fund is known, is designed to help local entrepreneurs bring new ideas or products to market.

See: P.E.I. ‘angel’ investment fund will help entrepreneurs jumpstart ideas and Province and Island businessmen team up to help entrepreneurs.

 As part of the 2017-2018 provincial budget, the provincial government announced $2 million towards the new fund. This will match an additional $2 million in private funds that are being raised by a group of seasoned business people living on the Island.

The fund is designed to assist entrepreneurs preparing to move to commercialization of their product or service.

Additionally, accredited investors will have an opportunity to participate alongside the fund in making investments.

Island Capital Partners will be managed by a four-member general partner team, including:

  • Ron Keefe, the former CEO of Bio-Vectra and Diagnostic Chemicals;
  • Alex MacBeath, the former CEO of Grant Thornton Canada;
  • Steve Nicolle, a former CEO at several technology start-ups; and
  • Paul Lypaczewski, a former executive with several software companies.
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Heath MacDonald, Minister of Economic Development and Tourism

“Our Island entrepreneurs are known for their hard work, creativity and perseverance in bringing new ideas and new products to market. We want to support them in moving from their idea, product or service, to market,” Economic Development and Tourism Minister Heath MacDonald, told us.  

See: Angel fund will support entrepreneurs, spur economic growth

“This new fund is a very important addition to the various supports we provide entrepreneurs because it shows how mighty Prince Edward Island can be when the private sector and government work together to help our start-ups succeed,” MacDonald said.

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Alex MacBeath

Alex MacBeth of Island Capital Partners told us that the fund “sees tremendous potential for growth and success for early stage companies in the current economic climate on Prince Edward Island.”

“While this new fund will indeed provide financial support to start-up companies, perhaps the most important feature is the extensive expertise and experience of the four-member management team. They will use their years of business experience to help foster and guide enterprises in which they invest as they prepare to grow and scale their companies,” Minister MacDonald says.

Background

Fund investments / operations

  • Investment decisions will be made by the General Partner’s management team.
  • Pool of capital will be minimum $4M, comprised as follows:
    • $2M – private investors
    • $2M – provincial portion
    • In addition to the pool of capital itself, individual angels will be permitted / invited to invest alongside the pool of capital.
      • Angels who have invested in fund also have opportunity to invest alongside the fund
      • Angels who have not invested in fund can receive pitch documents and the opportunity to invest as an individual
    • For example, if a decision was made to invest $400,000 in a company, the sources of the funds could be:
      • $300,000 from ICP Fund (funded 50/50 by IIDI & individual investors in the pool);
      • $100,000 from individual angels independent of the pool.
  • Investment criteria will include:
    • Investment size – $150-$500k. May be the lead investor or may participate in a larger initial round of financing;
    • Local – Canadian companies headquartered on PEI;
    • Growth potential – $10+ million in potential worldwide sales;
    • Sector neutral but recognizes that some sectors have greater potential.
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