| What is Venture Capital and How Is It Helping The | | | | with the purpose of providing venture capital |
| Growth of the Economy? | | | | exclusively. However, labor-sponsored venture capital |
| Before we discuss labor-sponsored venture capital | | | | corporations are different from other venture capital |
| corporations, let us first understand venture capital. | | | | corporations. Labor-sponsored corporations have to |
| Venture capital can be defined as the money that | | | | follow the rules and regulations that are very strict. |
| comes from professionals interested in investing in | | | | Investment funds managed by these corporations |
| new and growing companies with a potential of | | | | are known as labor-sponsored investment funds. |
| providing sizable economic contributions. Several | | | | Growing very fast in Canada |
| breakthroughs have been achieved with the help of | | | | In Canada, labor-sponsored venture capital |
| venture capital in the fields of medicine and | | | | corporations are growing at very fast pace. |
| electronics. Some of the important achievements | | | | According to investopedia, these corporations are the |
| that are the result of venture capital are personal | | | | biggest source of venture capital in the country. |
| computers, microprocessors, Internet infrastructure, | | | | Labor-sponsored venture capital corporations are |
| and wireless communications. Venture capital is | | | | responsible for providing 40% of the total venture |
| helping the economic growth of the nation by | | | | capital in the nation. The investors are getting |
| creating opportunities for newer jobs. According to a | | | | benefits of investing in the labor-sponsored |
| recent report, every $36,000 spent as venture | | | | investment funds. Along with the benefits of |
| capital creates a new job. | | | | retirement plans, these investors are enjoying the |
| Government is Realizing Importance and Offering Tax | | | | RRSP. Moreover, both federal and provincial |
| Benefits | | | | governments are also offering several tax benefits |
| Labor-sponsored venture capital corporations are | | | | to these investors. |
| coming up as a unique form of venture capital | | | | Understanding RRSP |
| investment. Both provincial and federal governments | | | | What is RRSP? It is the abbreviation used for |
| have realized the importance of venture capital to | | | | Registered Retirement Savings Plan. Contributions to |
| fulfill financing requirements of growing industries. This | | | | the RRSP are tax-deductible. These deductions are |
| has resulted in many tax benefits to the people who | | | | made against the income of the investors. For |
| invest in labor-sponsored venture capital corporations. | | | | instance, if the applicable tax rate is 40%, then you |
| Rules and Regulations Are Very Strict | | | | will save $40 for every $100 invested in RRSP. |
| Now what are these labor-sponsored venture capital | | | | However, there is a limit beyond which you cannot |
| corporations? Labor unions create these corporations | | | | enjoy this benefit. |