TORONTO, October 6, 2004 - VenGrowth Capital Partners Inc. ("VenGrowth"), a leading private equity firm with over $1 billion in assets under management, today announced the launch of its most diversified labour sponsored investment fund ("LSIF") to date. The VenGrowth III Investment Fund Inc. ("VenGrowth III") will invest across key Canadian private business sectors including technology, traditional industries and life sciences. The tax-advantaged Fund is 100% RRSP eligible and available in all provinces across Canada.

The launch of VenGrowth III precedes the capping of The VenGrowth II Investment Fund Inc. ("VenGrowth II") to maximize the long-term return potential for existing investors. Launched in January 2000, VenGrowth II is Canada's largest national LSIF with net assets of CDN$489.5 million and over 100,000 investors as of August 31, 2004. VenGrowth II will remain open to new purchases until November 19, 2004

Continuing with the conservative investment approach that has been the hallmark of VenGrowth's flagship LSIFs since 1995, VenGrowth III will focus on later stage venture capital opportunities in Canada's leading small and medium-sized companies. The Fund's diversified investment approach is designed to reduce risk compared to funds focused on one industry or market sector. The broad areas of technology, traditional industries and life sciences all represent significant sectors in the Canadian venture capital industry - responsible for 62.6%, 18.8% and 18.6% of transactions since 1996, respectively*.

"Since 1982, VenGrowth has continued to introduce new areas of investment expertise and has established itself as a leader in several key areas of private equity - including technology, life sciences and traditional industries," said David Ferguson, Managing General Partner of VenGrowth. "The VenGrowth III Fund will leverage all of the expertise that exists within our 26-person investment team, providing exposure to a broad spectrum of private equity investments in a single fund."

VenGrowth III will employ a variety of investment structures, including preferred equity and debt vehicles, to achieve its objective of long-term capital appreciation. Some investments will be traditional venture capital deals, while others will be structured as a blend of equity and subordinated loans that will generate regular interest income to the Fund (known as "mezzanine financing"). VenGrowth's dedicated Mezzanine Finance Group specializes in financing opportunities in established Canadian businesses, such as manufacturing and services companies.

"VenGrowth III is a sensible investment option for those looking to access the long-term growth potential of an asset class that is beginning to show signs of renewed activity in improved economic conditions," adds David Ferguson. "With unparalleled diversification and up to 30% in immediate tax credits, we believe that VenGrowth III provides a powerful alternative investment option for Canadian investors this RRSP season."

As an LSIF, The VenGrowth III Fund qualifies investors for a 15% federal tax credit on the first $5,000 invested each year. Ontario investors may receive an additional 15% provincial tax credit on the first $5,000 invested each year. The tax credits associated with the Fund are over and above available RRSP tax deductions.

*source: Macdonald & Associates, Canada's venture industry experts

About VenGrowth III
The VenGrowth III Investment Fund Inc. ("VenGrowth III"), is a highly diversified, core venture capital fund focused on innovative growth industries for above average long-term return potential. Launched in 2004, The Fund's portfolio will be diversified across a broad range of predominantly later-stage companies and industry sectors spanning technology (enterprise computing, application software, communications, semiconductors), life sciences (biotechnology, diagnostics, medical devices and imaging), traditional industries (manufacturing, services companies) and special growth opportunities. This diversified approach is designed to offer investors the combined benefits of high return potential and lower risk. The Fund is managed by a team of specialized VenGrowth professionals with extensive operational and industry experience. The Fund also leverages the expertise of an external advisory board including high profile members of US and Canadian business communities. In addition, the professionally managed Fund offers investors long-term performance potential, 100% RRSP-eligibility and, through its labour sponsored investment fund structure, eligibility for substantial tax credits.

About VenGrowth
With over $1 billion in assets under management, VenGrowth is Canada's largest private equity and venture capital firm managing both retail and institutional assets. Since 1982, VenGrowth's accomplished team of seasoned private equity managers has invested over $1 billion in 175 companies, building a strong track record of successful portfolio transactions. These investments have been made on behalf of over 160,000 individual investors as well as leading pension funds, banks, insurance companies and family foundations. VenGrowth's offices are located in Toronto (Corporate Headquarters) and Ottawa. For more information, please visit: www.vengrowth.com

For further information:
Angus Fisher
VenGrowth Capital Partners
(416) 967 2271
afisher@vengrowth.com