Venture Capital is money invested into a company to achieve a goal in accordance with the company's business plan. It is money that's invested into a company in order for both the company and the investor to make money.

SaskWorks is a venture or private equity fund. Venture funds primarily invest in private companies that require capital (money) to expand or change their operation in some way. It might be to buy equipment, hire more people, or upgrade in order to grow, increase production or move into new markets.

SaskWorks Venture Fund is a Labour–sponsored investment fund (LSIF) that can only be purchased by Saskatchewan residents. Labour-sponsored funds were created to encourage economic and business growth while being an investment for shareholders.

Another difference between SaskWorks and other mutual funds is the generous 35 percent tax credit provided by the provincial and federal governments.

Because SaskWorks primarily invests in privately owned businesses, certain exemptions and restrictions are applied to it and other labour-sponsored investment funds that are not applicable to regular mutual funds that invest in publicly traded companies. A full list of these exemptions is available in the SaskWorks Venture Fund Prospectus.

To learn how SaskWorks unique investment philosophy minimizes risk and sets it apart from most other venture funds, click here.

SaskWorks exists to stimulate a cycle of wealth creation in Saskatchewan. Residents invest in the fund, receiving tax credits and purchasing shares in SaskWorks. SaskWorks then makes investments in Saskatchewan businesses with the objective of achieving long-term capital appreciation for shareholders.

When you buy a SaskWorks RRSP, you are buying shares in SaskWorks Venture Fund, and indirectly buying shares in a variety of Saskatchewan companies. SaskWorks invests in businesses in Saskatchewan in order to increase the value of your shares.

Additional goals of SaskWorks are to help Saskatchewan businesses by promoting employee ownership or participation in company management, promoting economic stability in Saskatchewan and business continuity, job retention and creation, and maintaining ownership of Saskatchewan businesses by Saskatchewan residents.

This is the cycle of wealth SaskWorks is striving to create for Saskatchewan. Residents invest in SaskWorks; SaskWorks invests in carefully selected companies who then grow through the capital; SaskWorks fund increases in value with investee growth and exits; and SaskWorks shareholders then see returns on investment.

There are currently over 10,000 people who have invested in SaskWorks Fund. That's a lot of people investing their future in Saskatchewan businesses.

SaskWorks invests in twenty-nine different Saskatchewan companies. Over 1200 jobs have been created or maintained because of SaskWorks fund. That's an entire town worth of jobs developed through investment by SaskWorks.

Venture funds make money in a number of ways, and it varies with different investee companies. Sometimes venture funds benefit from a percentage of the company's profits each year, or through interest payments received from the company.

Usually though, the majority of the profits are made when a venture fund like SaskWorks "exits" or leaves the investment. The fund sells the shares in the investment back to the company at a profit, the company pays back the initial investment to the fund with interest, or the fund sells its investment to another investor.

Let's look at it on a small scale: it's a hot day in June. Your daughter and her friends are thirsty.

Scene 1: You give your daughter money to buy them all lemonade. That's not venture capital.

Scene 2: You give your daughter $3.00 to buy drink crystals and cups to make lemonade to sell at her lemonade stand. You decide ahead of time that she will give you $0.15 for each cup of lemonade she sells, but no matter what, at the end of the day, she has to pay you back the $3.00.

She sells 100 cups for .50 cents each, and must give you .15 cents for each cup. You make $12.00 on your initial investment of $3.00; she makes $35.00. That's venture capital (although most venture capital investments are +$500,000, so that would be a lot of lemonade).

The next day, she has enough money to buy her own drink crystals from her profits, and you can take your $3.00 and re-invest it as venture capital in soap for your other daughter's car wash business.

While some venture capital investments involve a much higher risk than other investments, SaskWorks strives to minimize risk to investors in a number of ways:

First, we call ourselves a "meat and potatoes" fund. We invest in real companies that make real products; companies that have an established history and a promising future in Saskatchewan.

SASKWORKS DIVERSIFIES ITS INVESTMENTS ACROSS MANY INDUSTRIES

SaskWorks invests in a variety of industry sectors and maintains a number of different companies in its portfolio.

SaskWorks Venture Fund keeps 25 percent of its assets in cash or investment grade securities (liquid assets) at all times. SaskWorks Resources maintains 20 percent of its assets in investment grade securities.

Before SaskWorks invests in a company, it conducts a thorough analysis of the company's potential as an investment, and then continues its involvement with that company. SaskWorks obtains certain rights for the Fund to help protect the value of the investments. These rights vary with each company, but include participation on a company's Board of Directors.

When SaskWorks enters into a contract with a company, SaskWorks and the investee form a plan on how both will move on from that relationship. Before we invest in any company, we have our "exit" negotiated right up front. The companies know how long our money will be invested with them, and on what terms, and we know it too. That way, everyone can make sound decisions and financial forecasts. This minimizes risk for our shareholders and for the portfolio company.

Not more than 10 percent of the net assets of SaskWorks Venture Fund can be invested in any one company at any one time, thus ensuring a diversification of investments and risk. SaskWorks Resources may invest up to 20 percent of its net assets in one company.

Lastly, some investors feel that they receive the equivalent of a 35 percent return immediately upon purchase. A SaskWorks investment pays from the start with the initial tax deduction and the substantial Federal and Saskatchewan tax credits (35 percent).

Although the Fund may declare capital gains dividends out of monies legally available for dividends from time to time, to date no dividends have been paid by the Fund on any shares. The Fund may annually capitalize certain amounts of its interest and other investment income and capital gains to the extent necessary to obtain a refund of the tax otherwise payable. This may have tax implications for shareholders holding their shares in non-registered accounts.

The Fund first sold common shares to the public in January 2001.

No. The Federal and Saskatchewan governments provide tax credits to eligible investors but have no other connection to the Fund, besides acting as a regulator. The Fund is a corporation created by the Fund Act and deemed to be incorporated under the Corporations Act. The Fund is a prescribed LSVCC for the purposes of the Federal Tax Act and is a LSVCC for the purposes of the Provincial Tax Act.

No. Federally, LSIFs have existed since 1982. The Saskatchewan government has increased the portion of its budget allotted to the tax credits every year since 2001. Increased investment by SaskWorks stimulates the economy, and the cost of the tax credits to the government is quickly repaid through the increased economic activity.

No. Companies are evaluated on a variety of aspects.

Investing in SaskWorks means you have SaskWorks shares. These shares cannot be publicly traded, but they do have a value per share unit. These shares change in value as the fund grows and changes.

As a SaskWorks shareholder, you are also currently a shareholder (indirectly) in 29 different, mostly private, companies in Saskatchewan; companies that investors in regular stock market investing don't have access to!

The minimum initial investment in a single installment payment is $500; the minimum subsequent subscription is $100. There is no maximum investment; however the yearly maximum for the tax credits is $5,000.

If you purchase your shares near the RRSP deadline, you must come up with a lump sum of money (see: Help!).

Some people choose to invest throughout the year in bi-weekly or monthly payments through a pre-authorized payment plan. In that case, a minimum investment is $40 bi-weekly.

SaskWorks can also work with your employer to help you set up SaskWorks contributions through your paycheque, reducing the income tax you pay each cheque, and increasing your investment in your future.

SaskWorks Venture Fund is sold by prospectus only and can be purchased from qualified financial advisors including mutual fund dealers, brokers, and credit unions.

The objective of the Fund is to provide its shareholders with an increase in share value over time, i.e., by capital appreciation. The share value of the Fund is set weekly.

SaskWorks shares are bought and redeemed at the price determined each week by dividing the net asset value of the Fund by the total number of shares held by its shareholders. The Fund's net asset value and, therefore, its share price, fluctuate with the value of its investments.

SaskWorks Venture Fund's mandate and legislation requires that the share price accurately reflect the value of its underlying assets. Our investments fall into two main categories: shares in private companies or, less often, shares traded on a public exchange like the TSE or the CDNX. Publicly traded shares are valued based upon market information, and adjusted to reflect the liquidity of the shares.

SaskWorks Venture Fund's investment team continually monitors each investment's performance. SaskWorks shares are valued weekly, and the weekly share price can be found here on our website. Remember: SaskWorks shares are not publicly traded.

Qualified professionals value all private shares. In this regard, each SaskWorks investment is valued at least quarterly. However, an investment might require additional valuation attention if a material change occurs during the quarter. A positive or negative material change in an investee company's circumstances will trigger a revaluation at any point throughout the quarter and will be reflected in our weekly pricing. For example, if an investee raises funds from an independent third party at a higher price per share than our last valuation, we will increase our share price to reflect that market valuation. Conversely, if an investee lost a major customer that could have a material negative affect, we will revalue and reduce the share price.

SaskWorks Venture Fund employs qualified professionals responsible for preparing investment valuations. These valuations are reviewed annually by an independent Chartered Business Valuator to ensure compliance with rigorous valuation standards. Further external verification occurs as part of the annual audit where valuations are reviewed to ensure the accuracy of the unrealized gain reported on SaskWorks Venture Fund's annual financial statement.

Eight years from the date of purchase.

The eight-year holding period is set by the Canadian government for all labour-sponsored funds. This period gives the investment money time to be invested and go to work within the investee companies.

If SaskWorks puts capital into a company, it takes time for that company to see growth. If SaskWorks removes the capital too soon, it's not fair to the company that's trying to grow. The eight years also helps you – giving your investment time to grow as well!

You may redeem under a special right of rescission, but it isn't wise stewardship of your investment. The eight-year holding period allows funds like SaskWorks and its investee companies to put your investment to work. Redeeming prior to the eight-year hold will likely mean you are not allowing your investment to reach its full potential.

You will have to REPAY THE TAX CREDITS. You will also trigger a redemption fee, depending on the length of time the shares have been held. The table below indicates the redemption fee on the amount redeemed for each year or partial year remaining before expiry of the eight-year hold period.

This fee is based on the market value of the shares at the time of redemption.

Shares may also be redeemed if the Shareholder has died, or has become permanently disabled. In those cases, the redemption fee does not apply.

Contact your Investment Advisor or SaskWorks Venture Fund to complete the necessary paperwork.

No, your investment will continue to perform similar to any mutual fund; it is now liquid and can be redeemed at any time.

As prescribed in the Income Tax Act, in order to qualify for tax credit status an investment fund must be sponsored by a labour organization. Qualified funds like SaskWorks are granted tax credit assisted status by the federal government and in some cases also by provincial governments. The funds hire professional managers and analysts to undertake investment analysis and make investment recommendations.

The Communications, Energy and Paperworkers' Union, Saskatchewan Area Council, is the sponsoring union for SaskWorks Venture Fund, and as such has representation on the SaskWorks Board of Directors, as do a number of Saskatchewan business people. All investment decisions are analyzed by SaskWorks experienced team of managers, and then presented to the board and recommended for board approval before investment.

Shares may be purchased for tax credits at any time during the taxation year, or up to a deadline of 60 days into the following year.

Investors receive 20 percent of the investment in tax credits from the Saskatchewan Government, and 15 percent of the investment in tax credits from the Federal Government for a total of 35 percent. For example, if you make a $5,000 investment, you will receive $1,000 in provincial tax credit and $750 in federal tax credit. That's $1,750 applied directly against your income tax owing.

The funds are set up to encourage growth in small to mid-sized businesses. When these companies grow, it helps maintain and create employment and it stimulates the economy. For example, to date, SaskWorks has been responsible for the creation or maintenance of 1,200 jobs in Saskatchewan.

A normal RRSP only allows you a TAX DEDUCTION, an amount deducted from your total income to calculate your taxable income. Your personal RRSP deductible amount varies with your personal income.

An investment in SaskWorks also gives you TAX CREDITS of 35 percent of your investment – an amount deducted directly from income tax otherwise payable.

After you purchase SaskWorks shares as an RRSP or a non-registered account, SaskWorks will send out the confirmation of a share purchase. If your shares are held in a self-directed account, the RRSP receipt will be issued by your plan holder. If your shares are held by SaskWorks, we will issue the RRSP receipt.

Saskatchewan Industry & Resources sends you a receipt for the tax credit (T2C). The T2C is used for both the Federal tax credit and the Saskatchewan tax credit.

The RRSP receipt and T2C are sent in mid-January for contributions made during the remainder of the year, and are comprised of any purchases made between March 2 and December 31. If your purchase was made in the first 60 days of the year, your T2C and RRSP receipt are sent within a short time of your purchase.

If you subscribed to the Fund last year or within the first 60 days of this year you are eligible for a 20 percent Saskatchewan LSVCC Tax Credit and 15 percent Federal Labour Sponsored (LSF) Tax Credit!

After you purchase shares in the fund, you will receive a T2C tax credit document from the Saskatchewan Government (this is your document for both the federal and provincial credits). Attach this to your tax return or if you are filing electronically, save the T2C in your file, and enter the amount of your contribution on the LSIF line.

Don't forget to enter it on both the provincial AND federal portions of your taxes to receive your full credits! Your 35 percent tax credit is then deducted from your income tax owing. On the Saskatchewan form (SK428), it is Lines 60 and 62, Box 6374. For the Federal form (T1 – Schedule 1) it is Line 48; Boxes 413 and 414.

Yes. The Saskatchewan Tax Credit limit is $1,000 in any one year, with no lifetime limit. The Federal Tax Credit limit is $750 per year, also with no lifetime limit.

Tax credits for purchases made in the first 60 days of the calendar year can be used for either the current year, the prior year, or split between the two years.

Yes. Any Saskatchewan resident with taxable income may purchase shares in the Fund by means of an RRSP.

Yes. An investor may contribute to a Spousal RRSP that purchases SaskWorks shares for his/her spouse.

You're not alone. This year, ask your financial institution to set up a bi-weekly or monthly withdrawal program that automatically deposits a set amount into your SaskWorks Fund RRSP. You'll benefit from the tax credits and RRSP deduction, and you'll be able to budget monthly.

Alternately, make a plan to invest any money you receive back from your tax refund into SaskWorks Fund. Your tax refund can then generate MORE tax credits!

Finally, many Saskatchewan companies are working with SaskWorks to provide a payroll deduction program for their employees. The SaskWorks contribution is made straight from your paycheque, and the tax credits and RRSP deduction are directly applied against the income tax that is usually deducted. Most people on payroll see only a $40 – 60 change in their net biweekly take–home pay, but they are making an annual contribution of $1040 – $5,000.

It is best to see your investment advisor. You may want to consider an RRSP loan. First, take a loan for the amount you want to invest in your SaskWorks RRSP. You receive the RRSP deduction on your taxes, AND your 35 percent tax credits, AND you're making an investment for your future! Then when you receive your tax refund, apply it to the repayment of the RRSP loan.

Maybe you can switch something in your portfolio to SaskWorks Venture Fund Shares. You might have a GIC maturing or a mutual fund you can turn over. Ask your advisor if you have some room on an already existing RSP fund that you can switch to SaskWorks. This way you benefit from the tax credits without using any additional money.

No, LSIF tax credits must be used in the year of purchase. There is no carry forward of LSIF tax credits. The only exception to this is if the purchase is made in the first 60 days of the year, in which case the tax credits may be claimed against income in the previous or current tax year in the same manner as RRSP deductions.

If you purchase your shares near the RRSP deadline, you must come up with a lump sum of money. To purchase shares throughout the year, speak to your Saskatchewan credit union or financial institution to set up pre-authorized payments to your SaskWorks RRSP.

Some Saskatchewan companies have established a payroll deduction plan to SaskWorks. This helps you invest painlessly. The tax deductions and tax credits are calculated immediately, so you see a big difference in the income tax you pay, but very little difference in your pay cheque!

Yes, as long as you use the portion of your existing RRSP funds that represents your contributions (versus income or capital gains), you can switch into SaskWorks Venture Fund by selling existing RRSP holdings, and receive a 35 percent tax credit on the amount of the switch.

You may open a SaskWorks Venture Fund RRSP by filling in the appropriate sections of the Subscription Form.

No. SaskWorks Venture Fund is not available to be purchased in an RESP.

TIP! Some people choose to invest in SaskWorks, and then use the tax credits they will receive to invest in an RESP, in turn receiving the 20 percent RESP grant, leveraging the credits from their initial SaskWorks investment. It is best to consult with a financial advisor about your specific situation when considering this.

Yes. You have up to 15 years to reimburse your RRSP for money borrowed to buy a home and if you purchase SaskWorks Venture Fund shares when you repay your RRSP account, you are eligible to receive the 35 percent tax credits – therefore you are effectively repaying your RRSP loan with "65 cent" dollars. You will not receive the RRSP contribution deduction of course, because you have already received it prior to using the money to buy a home. SaskWorks Venture Fund cannot be redeemed for a house down payment through the New Home Buyers Plan.