‘I think there’s a crying need for it’

Ashley Fitzpatrick
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Killick Capital founder says N.L. making right move with new venture funds

Mark Dobbin was in New York Thursday when Innovation, Business and Rural Development Minister Terry French was referencing his private equity investment firm, Killick Capital.
French repeatedly mentioned to reporters the success of Verafin, a company specializing in fraud detection programs and a company in Killick’s portfolio. He also specifically mentioned Killick as one of the few firms in the province to offer venture capital.

Mark Dobbin of Killick Capital says the province’s decision meets “a crying need” for venture capital in Newfoundland and Labrador to help encourage new companies. — Telegram file photo

The minister said the provincial government staff met with Killick representatives before making the decision to invest at least $10 million in public money into two new venture capital funds, to spur the establishment and growth of new businesses.

“The private venture capital that we have — Killick, for example, I think is one of the companies that invested in Verafin — well Killick is totally tapped, so many of these, the couple of funds I can think of, are totally tapped,” French said. “And, actually, the department had met with these venture capitalists in the province and they were encouraging (the department staff) to take part in this because their funds were running low and the more venture capital you have, the better off you are.”

French described the province’s move as an attempt to encourage new industry.

“To try to grow a knowledge-based industry, that’s where you have to be. You have to have venture capital,” he said.

Friday afternoon, back from New York, Dobbin told The Telegram he supports the province’s move.

He said having Newfoundland and Labrador being a part of a modern, global economy will require the availability of venture capital.

“I think there’s a crying need for it,” he said.

“If you have a look at the United States and the value creation and the wealth creation and the jobs that are happening down there — they have a very strong, deep venture capital market. And when you come up to Canada, our venture capital market is not as well developed as the American model, but it’s not bad. But the farther you get away from the centre of Canada, where the pools of capital are, the less access that companies have and, of course, we’re the farthest away, so we suffer the most.”

Dobbin’s Killick Capital has invested in companies including Max Arts, Athletics and Wellness; Verafin; Greyfirst Corp. (developer of Celtx software for film and theatre production) and Plasco Energy Group. Killick also has a global aerospace arm, from Dobbin’s background at CHC Helicopters, with money and support to CT Aerospace.

“We have a tremendous startup community here in Newfoundland and Labrador,” he said.

“Killick Capital has been operating in this sector since 2005 and we’re only one, small company with limited capital and, more importantly, limited human resources, so you can only take on so much. And it’s to our great regret that there are a tremendous number of very good, deserving companies that aren’t getting funding and we don’t have the bandwidth to direct capital and help mentor them to grow.”

Challenges

Killick has had successes like Verafin, but also faced its challenges and guarded against failures over the years.

Dobbin said Killick had sold its shares in the biotechnology company PharmaGap prior to that company’s forced halt to trading in 2013.

That halt was ordered by the Ontario Securities Commission, due to a failure to file audited financial statements, according to a TC Media report.

PharmaGap’s chairman was Rod Bryden, who recently left the CEO’s chair at another Killick-investment: Plasco Energy Group. Asked about that company’s future, Dobbin said Plasco — planning to turn garbage into electricity — has matured its technology and the company will be looking to break ground on a commercial plant this year.

As for the province’s potential investments, as it heads into the world of venture capital, he said $10 million being placed into a regional fund and Newfoundland and Labrador’s own new venture capital fund — further details to be announced — will help Newfoundland and Labrador avoid economic isolation.

“We have, I’m aware of, two or three companies in the Genesis Centre (at Memorial University of Newfoundland) that have some very promising technology which, if it comes to fruition, would be successful on a global scale,” he said.

He said it should be expected the new venture capital being injected into the region from the public coffers will attract, and be leveraged for, additional private-sector dollars, but also advice and support for local entrepreneurs.

“(Venture capital) is an ecosystem where people like to co-invest with each other and the investors bring money, knowledge and contacts to the companies in which they put their money and they don’t like to invest in companies that are too far away. They don’t like to lead the investment. So it’s very important to have local or regional-based companies that will be the lead investor or at least an institutional investor in that region,” he said.

“That then becomes a conduit for knowledge and capital to flow into our local companies, and we can be the beneficiary of both.”

afitzpatrick@thetelegram.com

Organizations: PharmaGap, Greyfirst, CHC Helicopters Ontario Securities Commission TC Media Plasco Energy Group Genesis Centre Memorial University of Newfoundland

Geographic location: Killick Capital, Newfoundland and Labrador, Canada New York United States

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