A New Approach to Economic Growth in Rural Ontario
First Stone Venture Partners
First Stone Venture Partners (FSVP) is a venture partnership founded by entrepreneurs who have invested their own capital in a fund to help grow early stage technology businesses. Our goal is technology-based innovation in rural communities. We have raised $5M that has been matched by the Government of Canada, through the Upper Canada Equity Fund in order to make 25 investments in new start-ups over the next three years. Unlike typical venture capital firms that focus on exits, First Stone’s goal is to build sustainable companies that boost economic diversity.
First Stone’s partners are social entrepreneurs – they invest and provide mentoring to technology start-ups to improve their success. They are successful entrepreneurs who will invest $5 million of their own capital that has been matched by Government of Canada funding provided to the Upper Canada Equity Fund.
First Stone offers a new approach:
- Social entrepreneurship. First Stone’s goal is to build sustainable community businesses and create vibrant business ecosystems – to create jobs and opportunities in rural communities.
- Investment in rural communities. First Stone believes that innovation can be a strong driver of economic development – rural communities are resourceful, their young people are well educated, costs of doing business are low, and they have a great quality of life.
- Disruptive technologies. Large-company business models have already been revolutionized but the change has only begun for small- and medium-sized firms. In Canada only 10% of the potential benefits from information and communications technologies have been leveraged and there is tremendous opportunity for start-ups that can provide software-related, Internet-enabled solutions to help companies improve customer service and reduce costs of doing business. Such start-ups can locate anywhere.
- The business incubator model. First Stone has proven the model over the last three years in Prince Edward County. As well, the model has been proven internationally – Israel is perhaps the best example. Its Technological Incubators Program has helped transform its economy from an agricultural base to “Start-up Nation” – today a quarter of Israel’s workforce have good, high-technology jobs.
- Public-private partnership that work. First Stone has partnered with the Upper Canada Equity Fund to enable this job-creation model.
- A revolution in Canada’s innovation system. First Stone’s model is scalable across the country. It offers rural communities a new path for economic development and renewed opportunity, especially for its youth.
First Stone’s commitment is that Canada’s rural communities will be part of the new global economy. The firm believes its model is applicable to all rural communities and has the potential, through technology innovation, to deliver prosperity, opportunity, and economic development across Canada, starting in Prince Edward County.
Is diverse, built on experience and achievement. We have been serial entrepreneurs and worked in multiple sectors – in Silicon Valley and with Fortune 100 clients. We have built successful businesses and been business leaders. We have experience in IT-architecture, commercialization of research, corporate law, and corporate/government communications. And we have many years experience as successful entrepreneurs.
Our Vision is to have First Stone Venture Partners incubators across the country, led by the private sector, supported by communities, and offering superior investment returns. As social entrepreneurs, we seek to create economic diversity, entrepreneurial success, and enduring investment returns through technology-based new business start-ups. We value integrity, hard-work, fairness, social responsibility, and capital – both people and money – we like to get the best out of them and hate to waste creativity and resources.
FSVP is an angel syndicate that co-invests with the public sector through joint investments with the Upper Canada Equity Fund. Angel syndication is an internationally recognized best practice investment which;
- activates angel investment,
- enables angel investors to build and maintain a portfolio of investments, and
- simplifies the funding process for the entrepreneur.
The use of angel investment syndication is most common in Europe. It involves several private investors working together to share the risks and returns of investing in private companies. Syndicates differ from individual business angel investors as syndicates are typically comprised of a ‘fixed’ group of people who invest together over a period of time. In Europe, syndicates often co-invest with the public sector or Government to address the absence of early stage equity capital for technology startups. Examples include:
The principal benefits of participating in an angel syndicate are:
- Diversified portfolio: portfolio investing (i.e. investing jointly in more than one company) is a lower risk approach to investment compared to the higher risk ‘all eggs in one basket’ approach of investing in just one or two companies;
- Pooling of economic resources: pooling of funds provides the opportunity to invest in several companies and/or in larger deals;
- Pooling of skills, contacts and experience: syndicate members will benefit from each other’s skills, networks of contacts and experience. This all enhances the possible success and returns of investing; and
- Due diligence: ability to undertake a greater level of due diligence.