| Some
of the world's most successful household names, including Microsoft,
Cisco and Intel, were originally funded by venture investors.
Retail venture capital funds - known as "Labour Sponsored
Investment Funds" (or LSIFs) - offer funding and strategic
guidance to entrepreneurs in exchange for an ownership stake.
While
mutual fund portfolio managers buy and sell publicly traded
stocks, venture professionals actively identify and nurture
the most promising private companies until they are ready
to be purchased or offer stock through an initial public offering
(IPO) at many times the original investment. The highly involved
nature of venture investing makes the caliber of the investment
team critical to the success of the investments. The goal
of the investment team is to guide the highest quality companies
to success many times over - allowing the shareholders to
realize the powerful return potential of the assert class
its responsible for.
If
your investment objective is long term capital appreciation,
then consider an investment in a labour Sponsored Investment
Fund.
|
30
% RRSP Tax Credit + RRSP Deduction
|
| Investment in a
Labour Sponsored Fund |
$5,000.00
|
| Federal tax credit
(15%) |
$750.00
|
| Provincial tax
credit (15%) |
$750.00
|
| RRSP tax deduction
(46% marginal tax rate) |
$2,320.00
|
| Net
Out-of-Pocket Cost |
$1,180.00
|
| Note:
Research
Orientated Investment Funds will earn investors an extra
5% tax credit. |
| Calculations
are based on a combined federal and provincial (Ontario)
tax legislation and purported as at July 31,2001. Tax
credits are available on investments of up to $5,000.
Shares must be held for 8 years in order to keep the tax
credit. Early redemption fees apply prior to 8 years.
The calculations assume that the marginal income tax rate
applies to the full amount of the RRSP investment and
that the investor is within their 2001 RRSP contribution
limit |
Promotional
material from VenGrowth
II Investment Fund Inc, titled "Smart
Investor's Guide: Venture Capital Investing", which
we have chosen to feature as a way to better illustrate the
features and benefits of this product is provided using the
above link.
As
a counter-play to the fund company's hoopla, Rudy
Luukko's article is well worth a read. To compare the
5 year returns, click through to Morningstar.
|
