MONTREAL — The ProMontreal Entrepreneurs (PME) Fund is rating itself a success as it prepares to celebrate its 10th anniversary June 16 at the Gelber Centre.
The fund, launched in 1999 to help innovative young local Jewish entrepreneurs, provides startup funding of up to $50,000.
Fund director Rachel Chemtob said that since the fund’s inception, 26 businesses, out of the hundreds of applications it has received, have received startup funding, and more than half of the ventures are successes.
Howard Berger, co-executive director of Agence Ometz, the Federation CJA agency that administers the fund, said that “for a venture capital fund, that’s amazing.”
The success stories Chemtob and Berger cited include the Tendler Group, a market research firm for pharmaceutical companies founded in 2001; Wave Sensation, an audio production company, also launched in 2001; and the Centre Santé Dentaire, started up about five years ago.
The fund processes an average of eight applications per “round” of funding from entrepreneurs every six months. Sometimes, Chemtob said, all the applicants are rejected. But other times, one, or two, or even more might be approved.
“It all boils down to how the committee sees the potential business,” she said. “The decisions are based on viability.”
Approval for funding is contingent on a stringent evaluation process by an allocations committee, one that meets every three months to assess the viability of the proposed businesses.
The committee is still overseen by the two men whose idea it was to provide startup capital to young Jewish entrepreneurs intent on building their businesses and lives in Montreal: private investors Stephen Bronfman and James Alexander.
Bronfman, chair of Claridge Ltd.’s SRB Investment Inc., and James Alexander, head of Palomino Capital Corp., who are friends, had played with the idea for a couple of years of launching the fund before finally acting upon it.
Bronfman is the son of billionaire philanthropist Charles Bronfman; Alexander is the grandson of the late Sam Steinberg, who built the Steinberg grocery empire.
The two friends put up more than $500,000 to serve as the primary source of venture capital for burgeoning entrepreneurs. Chemtob said that the original funds, held as an interest-yielding endowment within the Jewish Community Federation of Montreal, are still the primary pool. Claridge official Nancy Rosenfeld continues to serve as the liaison between Claridge and the federation.
The process has seen a little tweaking over the years, Chemtob and Berger said. The original business plan outline applicants followed in 1999 was 20 pages; now it’s only a few. And instead of three years to begin repaying the startup money, it’s now one year, and at the prime interest rate. About five years ago, the upper age limit for recipients went from 35 to 40 (the lower age limit is still 18).
What has remained unchanged in the PME Fund, Chemtob and Berger said, is the level of mentorship, networking, and resource support for the fledgling entrepreneurs.
“It is the kind of support you cannot get from a bank,” Berger said. “What began as a mini-capitalization fund has become a full-fledged, comprehensive support system.”
Chemtob also acts as a go-between for other sources of funding, since funds out of the PME pool can serve as collateral against other business loans, such as from banks.
“I develop the partnerships,” she said.
The fund traces its original roots to ProMontreal, a federation initiative that began in the early 1990s to keep younger Jews in Montreal.
The fund grew out of the general PME program, itself a revised version of now-defunct Jewish Vocational Service’s Entrepreneurial Advisory Program, which was once linked to ProMontreal.
The general PME program provides comprehensive resource support for younger Jewish entrepreneurs through seminars, workshops and mentorship programs, and the fund is one part of that program.
