$3.5 Billion Tech Start-Up Fund

$3.5 Billion makes for pretty good optics.

Intel and 24 venture capital firms said Tuesday that they planned to invest $3.5 billion in American start-ups over the next two years.

In addition, Intel, Google, Cisco Systems, Microsoft and 13 other employers pledged to add jobs in 2010 — specifically by hiring 10,500 graduates of American colleges, largely those with computer science and engineering degrees.

Most of these dollars are likely from venture money that would be invested anyway  but the structure of the fund is interesting. Intel’s Venture Capital arm is leading with $200 million along with another $150 million pledged from two dozen venture capital firms — including top-tier names like Kleiner Perkins Caufield & Byers, Venrock and DCM — have committed to investing portions of their funds in start-ups founded in the United States. (unlike the Alberta Government $100 million AEC fund where the investment does not have to be in Alberta; see “What to do with $100 million?”)

There is growing momentum and interest in this kind of fund for Alberta technology startups. This kind of structure is interesting to consider; an anchor commitment from a major private sector player leveraged with  syndicated pledge participation from multiple venture capitalists.

In terms of material economic diversification, we have a very long way to go to rival the  wealth creation we’ve enjoyed from the oil and gas sector. To put things in perspective,  Alberta’s 2008 energy revenues totaled about $106 billion, roughly the equivalent  of the combined annual revenues of two of the world’s  largest technology companies, Microsoft ($59B) and Apple ($47B).

Alberta’s opportunity is for the energy and technology (as well as a variety of other)  sectors to be complementary with the shared vision and goal of leveraging the incredible resources, talent and infrastructure we have in this province toward accelerating the creation of a world class, diversified provincial economy. We have all the ingredients, what’s required now is vision and will.

Keep an eye out for a private sector tech fund.

One thought on “$3.5 Billion Tech Start-Up Fund

  1. Hi Trent, I always love your blogs. Although I think the Alberta government tries very hard to help Alberta technology startups, I am not sure if they have the political will and power (against the big oil companies) to achieve what needs to be done… if you were to start a lobby group, I am right behind you! Cheers! Francis

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