How should state craft venture capital fund?
During the last legislative session, lawmakers passed many bills designed to stir job creation. They left gaping holes in the puzzle, however. One key missing piece is a venture capital fund. The lack of one puts Wisconsin at a competitive disadvantage.
State Sen. Tim Cullen, D-Janesville, believes he can take a lead role in writing legislation that might be ready when the Legislature reconvenes next year. He’s chair of the Senate Committee on Small Business and Venture Capital, which heard testimony during a six-hour public hearing Thursday.
Cullen says many speakers supported funding either from general-purpose revenue or borrowed dollars. They backed “firewalls” to protect the fund from politics. And they agreed that public money should be doled out only if private money is invested first.
The sticking point for lawmakers last time around was whether the fund should involve CAPCOs, or certified capital companies. These out-of-state companies lobbied for inclusion, but our state’s history shows they lack accountability.
Are these speakers on the right track? Should the state use general purpose money or borrow money to pad such a fund? How can taxpayer dollars best be protected? And why is venture capital so crucial to fostering economic development?
We’ll share our perspectives in our editorial Sunday.
Greg Peck can be reached at (608) 755-8278 or gpeck@gazettextra.com. Or follow him on Twitter or Facebook
Sep 11, 2012 at 7:40 a.m.
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I agree Answer, the best thing government can do is stay out of the way of business, that seems to work best, anytime overnment gets involved with an industry or a specific business it is a disaster, Wall Street and Banks for the GOP and Solyndra/Auto Industry for the Democrats. Stay out, if these guys had any business smarts they wouldn't be in government.
Sep 9, 2012 at 7:04 p.m.
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I strongly believe there are some things Government is very good and effecient at. This is not one of them. Government should not be in this type of business.
Sep 8, 2012 at 1:44 p.m.
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It's important to have some perspective, JohnWicket. After all, every time we build a road or open a school, we're "supporting" business. The key is that we're also supporting our own interests as citizens. My position is that there is a strong progressive case for transparent, accountable public investment via standardized and de-politicized mechanisms such as the TIF district. Granted, the system is not perfect, and there are no guarantees in life, but it's possible to build in guarantees through a TIF agreement that will ensure a return to taxpayers or at least a return of funds if goals are not met. The TIF, after all, is designed to take an area that is not generating revenues -- derelict, empty, or underused properties -- and turn that around. If done properly, not only does that increase tax revenue in the long run, but it also generates economic activity including jobs for the community.
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Put another way, it also allows the public to have some say in the type of development that they want and gives us more control over our own destinies compared to sitting and waiting and hoping for an angel (like Ken Hendricks) to come to town and bestow us with gifts.
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Similarly a statewide venture capital fund is not in itself a bad idea. It does, however, need oversight, accountability, and transparency. I'm not yet confident that the quick-let's-do-it Walker approach has created a WEDC that meets those standards, although it remains to be seen. Taking the time to craft a venture capital fund that is in the public interest is a good idea.
Sep 8, 2012 at 11:07 a.m.
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I'm guessing that you won't be voting for Romney.
;-)
Sep 7, 2012 at 7:25 p.m.
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Aren't we, as taxpayers, already supporting enough business "venture capital" through free TIF properties and tax deferments? I, like many citizens am tired of subsidizing private businesses with no guarantee of any kind of return on "public" funds. Why should we also support this kind of thinking at the state level? Which political pigs will be the first in the trough? Are insurance companies, banks, construction firms and law firms looking for a slice of government pie also? I know plenty of private citizens who are also in need of public assistance. Should we now ask ourselves which group is most deserving and in need of our support? What is fair to the average American taxpayer?
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