Millions Invested in Nova Scotia First Fund

Nova Scotia companies in the technology and life sciences sectors will benefit from an investment of $8 million in the Nova Scotia First Fund, Economic Development Minister Cecil Clarke announced today, March 24.

"Innovation is key to the expansion and growth of our economy," said the minister. "Strengthening innovation systems in Nova Scotia was one of the key recommendations of our growth strategy. This investment will help companies get off the ground in the early stages and generate jobs and investment in the province."

The First Fund, which is managed by InNOVAcorp, is a venture capital fund for companies in the information, technology and life science sectors. The First Fund is aimed at helping companies in the early stages of growth and development.

"Today's announcement doubles the size of the fund and will help to bridge the access to capital gap that exists in Nova Scotia," said Colin Latham, chair of InNOVAcorp. "It will give us a valuable tool to help entrepreneurs and businesses grow and expand their employment, revenues and export markets."

Since its inception seven years ago, the fund has invested in 19 companies, with the current portfolio companies employing about 160 people full time. The fund has also created significant spin- off investment. As an example of this leverage impact, the last 19 investments have totalled $8.7 million and the cumulative capital invested in these companies is about $105 million. That's 12 times the amount invested by the fund.

"That success is a key reason we are making a significant re- investment in the First Fund," said Mr. Clarke. "We are pleased to make this investment today, because tomorrow, we know we'll see a solid return."

The additional investment funds will be made available in the coming fiscal year starting April 1st, and will be targeted at businesses that are operated by Nova Scotia entrepreneurs and that demonstrate fast growth and commercialization opportunities in the knowledge-based sector.

Companies that have benefited from the fund include Chitogenics, a bioscience company currently in clinical trails for a biomaterial it has developed to treat surgical adhesions with increased effectiveness and reduced costs. The company derives its raw product from waste shrimp shells.

"Without the First Fund, our company wouldn't be where it is today," said Marina Zazanis, president and chief executive officer of Chitogenics. "It helped kick start our operations and opened the door to additional sources of financing."

InNOVAcorp helps companies succeed in their early stages of growth and development by promoting innovation and commercialization of new products and technologies. It is making a significant contribution to the rapidly growing technology and life sciences industries of Nova Scotia through venture capital investment, mentoring, and incubation facilities and services.

Opportunities for Prosperity, Nova Scotia's first growth strategy in a decade, was released in the fall of 2000. Since then, 18,000 new jobs have been created in Nova Scotia.