A group of 26 Cape Breton investors have pooled $1.3 million of their personal money to form the island’s first venture capital fund, Cape Breton Capital Group.

General Partner Todd Mercer, who runs residential oil supply company Mercer Fuels, said in an interview that the fund was inspired by regular gatherings of local businesspeople, during which they often discussed ways of fostering entrepreneurship in Cape Breton.

“We established the fund to support early stage startups and business extension for more traditional businesses in Cape Breton,” said Mercer. “We’re looking to drive economic prosperity and create jobs by providing seed funding to new businesses, and we want to ensure local ownership of existing, traditional businesses.”

The fund's partners are all unpaid volunteers. Manager of Operations and Investments Holly Chisholm is the only paid staffer. Mercer said the partners will also be encouraged to take personal stakes in the fund’s portfolio companies.

“The way I see the group is that it is a gateway to investment from a segment of the Cape Breton business community,” he said. “We're looking to leverage our impact by … also allowing the angel investors to do their own thing on top of the fund.”

Mercer said CBCG is largely technology and sector agnostic, instead aiming to invest in companies with significant operations in Cape Breton with an eye towards creating jobs in the region.

The fund is now officially accepting applications, with initial funding capped at $150,000 per company. Companies can also apply online through the fund’s website, and Mercer promised that every entrepreneur who reaches out will receive some form of response.

He expects CBCG will make its first investment in a matter of months, with six or seven additional deals to follow in the coming two years. Some of the $1.3 million is also earmarked for follow-on investments.

Mercer said CBCG is managing exclusively private sector money. And while the partners have had talks with the provincial government and other local VC firms, like Build Ventures, they do not plan to enter into a limited partnership deal with the province, unlike most other funds in Nova Scotia.

The Cape Breton Capital Groups is being launched as the Atlantic Canadian startup community has been searching for more angel investment and organized angel groups. Though CBCG is not officially an angel group, the six-figure deals it is targeting and the potential for portfolio companies to ink additional funding deals with individual partners means it has the potential to fill a similar role for some startups.

“We have a group of people that are really passionate about the community,” said Mercer. “And community economic development is really the core goal of this group.”