Why venture capital is necessary

Venture capital plays an important role in fostering a strong technology sector, in Alberta and around the world. It is critical for transforming cutting-edge ideas and technologies into viable commercial products.

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Growing a technology company usually requires outside investment beyond what is contributed by a start-up’s founders, friends and family. Young start-up companies often cannot show a history of reliable revenue, have few tangible assets, and have high-risk business models. These factors make it likely that traditional lenders and banks will be unwilling to provide the funding a start-up needs.  

Venture capital provides tech start-ups with the necessary bridge between early funding (including grants and angel capital) and funding available to larger, more established businesses (such as bank loans, institutional funding or public markets).

VC-backed companies have a higher survival rate, higher revenue and employment growth compared to their non-VC backed counterparts. A self-sustaining VC industry will result in a diversified, resilient economy, where Albertans will benefit from quality jobs, a high standard of living and a broad base of economic opportunities.

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