Magna/Ontario electric car deal swamps bucks for local VCs
News Item: Ontario to invest $48 million in Magna electric vehicle effort
As many entrepreneurs will recall, the last Ontario budget had nothing new to help arrest the long term decline in the state of the local venture capital scene. If you have something to do with cars, though, you’re golden. The $48 million of tax dollars going to Magna sounds a lot like the $98 million that went into the “Green V8” engine plant in Essex (largely in 2010), near the provincial ridings of two important Liberal cabinet ministers. But a bit more “techy” for sure.
Compare this single $48 million mega-corporate injection to what Ontario VCs and entrepreneurs will have seen so far this year. According to the OVCF website, one new fund received a formal capital commitment this year (happily), but OVCF is unlikely to have actually funded more than a few million dollars of their three formal commitments year-to-date. At the Ontario Emerging Technologies Fund, the Ontario government has announced a total of $34.8 million in “commitments” since the entity was formally created in February 2009.
If you’re a budding entrepreneur looking around for your next thing in the hopes of eventually securing meaningful government financial support, you’d be well-served to consider 1) joining a multi-billion organization like Ubisoft see prior post “Can Rainbow Six save Ontario’s economy?” July 9-09), or 2) trying your hand at some new-fangled thing in the auto business.
MRM
Mark, personally I think the government should stay away from picking winners. The market should decide which companies make it and which do not. How can a central planning agency like the government decide where the market and demand are going to go?
Please consider http://www.nbcbayarea.com/news/local/Solyndra-Filing-a-Disaster-for-Obama-128816968.html
Similar numbers were spent to save 1,100 jobs that actually now are gone as in your example of UBSoft.
If the government run balanced budgets, cut spending and taxes there would be more private capital to invest into the economy, which in turn will create more jobs, a positive feedback look and prosperity.
Roman.