Build Ventures, the Atlantic Canadian regional venture capital firm, has officially started building its second fund with a $15 million commitment from the Nova Scotia government.

The provincial government and its VC agency Innovacorp announced the commitment to Build on Friday. The government will also devote $10 million to another fund for early-stage investments to complete its longstanding commitment to provide $25 million to VC funds.

Build invests in scaling companies and so far its first fund has backed 14 companies with initial investments of $1.5 million to $3 million each. It’s the only organization in the region meeting this need, and it will need to close its second fund to ensure there’s a funding body for companies that are starting to scale.

“It means that we are now in the fundraising phase for Fund 2  . . . which we’re targeting at $50 million to $75 million,” said Build Partner Patrick Keefe in an interview on Saturday. “We are heads down and focused on this.”

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In July 2014, the Nova Scotia government signaled that it would ask for private sector fund managers to set up and manage a fund or funds in the province. The government would contribute $25 million, but the managers would be required to bring in capital from other sources as well.

So far, Build II is developing the same way Build I did -- with a $15 million commitment from Nova Scotia. Build then attracted funding from other governments and private investors for the first fund: $15 million from New Brunswick; $10 million from Newfoundland and Labrador; $2.5 million from Prince Edward Island; $10 million from the federally owned BDC Capital; $5 million from privately owned Technology Venture Corp. of Moncton. There were also a few other private investors.

Keefe said it is “far too early” to say that the second fund will have a similar makeup, though he and partners Rob Barbara and Patrick Hankinson will approach these parties about the second fund. Keefe added that the VC industry across the country is trying to encourage more private sector investment and Build is hoping to attract backing from pension funds, insurers and money managers.

This time, he said, the team will be able to showcase the portfolio of companies it has assembled in the first fund over four years.

“It helps to have a track record,” said Keefe. “It’s always more difficult to be a startup fund manager. . . . Unfortunately, four years is not enough time to fully evaluate the fund, given that it’s a ten-year fund.”

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The first fund does not yet have any exits, but several of its companies have shown their strength by booking major funding rounds led by VCs from Silicon Valley or Ontario: US$15 million by Halifax-based Manifold; US$12 million by Fredericton-based Resson; and US$9 million by Halifax-based Affinio. Build has also invested in Halifax-based Dash Hudson, which has been profitable since the spring.

While Build is continuing with its fundraising, the Nova Scotia government must now continue the process of selecting an early-stage VC manager – a process that’s now taken three-and-a-half years.   The goal is to have this yet-to-be-named fund providing rounds of, say, $50,000 to $200,000 while Build can provide seven-figure rounds.

“Build Ventures already plays an essential role in developing Nova Scotia’s venture capital ecosystem, and moving forward it will be able to continue to provide follow-on capital for the most promising start-ups in Atlantic Canada,” said Gilles Duruflé, a selection committee member. “To ensure Nova Scotia’s start-up community continues to grow, it is also important to bring a new private-sector-managed fund to the region to support early stage companies.”

Disclosure: Build Ventures, Innovacorp and the Nova Scotia government are clients of Entrevestor.