British Columbia’s provincial government recently announced a new BC Tech Strategy, focused on supporting the expanding tech sector. The strategy has three main pillars: capital, talent, and markets.
The first pillar is comprised of a BC Venture Capital Investment fund of $100MM that will be used to fill some of the need for access to investment for entrepreneurs and young startups in their initial stages.
What Will the Fund Do?
“With this fund we’re creating a stronger foundation for B.C.’s technology sector, which is a major employer in communities across the province, to shine on the global stage while creating well-paying jobs back at home for British Columbians.” said Premier Christy Clark when announcing the fund in December.
The BC Tech Fund aims to help promising tech companies in the province access Series A capital funding. Also focused on establishing a sustainable venture capital system, the fund will build on previous initiatives such as the BC Renaissance Capital Fund (BCRCF) and will work alongside the province’s established Angel investment community to improve and encourage further investment. The BC Government is currently in search of a private sector fund manager who will be administering the fund.
The Capital Pillar of BC’s Tech Strategy
Next to the fund, the capital pillar will continue to support a competitive tax system. Currently, BC features the lowest combined corporate tax rate in the G7 (26%), significantly lower than the +40% rate in California.
Furthermore, the province offers income tax credits up to $33MM every year for venture capital firms through the Small Business Venture Capital Act, including a 30% tax credit for BC residents that invest in eligible BC small businesses or via accredited BC-based Venture Capital Corporations. There are additional credits available for digital animation, visual effects, and interactive digital media. The government of BC is also justifiably proud to promote the fact that BC has the lowest personal income taxes in most brackets.
The Talent and Markets Pillars
The BC Tech Fund will create an avenue for increased investment into the province’s young tech companies. Details regarding the remaining two pillars, talent and markets, have been released this month, including an exciting announcement made at this year’s BC Tech Summit about the new K-12 curriculum changes for BC’s students. The Government will also be focusing on helping companies access new markets, including creating a streamlined process to facilitate selling to government itself.
We’re awaiting further specifics with regard to the fund’s administration and the additional pillars focused on developing the rapidly growing tech sector in BC.