UPDATE 2-Canada sets plan to resuscitate venture capital sector
* The C$400 mln was announced in budget
* Ottawa wants to keep entrepreneurs, woo back investors
* Venture fundraising has dropped since dot-com bubble
* Gov't wants to attract foreign expertise and capital
By Leila Lemghalef
MONTREAL, Jan 14 (Reuters) - Canadian Prime Minister Stephen Harper announced a plan on Monday to provide C$400 million ($408 million) in venture capital to stem the loss of young entrepreneurs to the United States and to rekindle investor interest in providing start-up funds for new ventures.
The money comes in response to consultations that showed venture capital returns have been poor across the world and venture-capital fundraising in Canada has declined since 2001 following the burst of the dot-com bubble.
Governments have been the dominant source of venture capital funding in Canada recently, and a government statement on Monday said the consultations found that reasonable government incentives would be needed "to attract institutional investors who have left the asset class in Canada over the past decade".
"We will provide the resources needed to put Canada's venture capital industry on the path to sustainability and ensure Canada's high-potential firms have the resources they need to succeed," the statement quoted Harper as saying. Continued...