Monday, July 07, 2003
In an effort to boost their economies, a number of Midwest states are pushing venture capital initiatives.
There's only one problem. As one venture capitalist comments: ""You get the feeling people are groping in this direction without a whole lot of understanding as to what they're trying to achieve." Read more.
Building venture capital networks is a subtle business, and throwing money at the problem is not a good approach. Instead, states should be looking to identify ways to co-invest with established firms. Massachusetts Technology Development Corporation provides a good model to follow. Browse the MTDC web site to learn more.
As MTDC notes, "We require co-investors, including financially sophisticated angel investors. MTDC is rarely the 'financial lead', but it is not unusual for our Corporation to make the first formal commitment."
On the federal level, the SBIR program is designed to lead projects to co-investors through a three stage process.
Both MTDC and SBIR have been around for longer than 20 years. There is a lot of good experience to guide new initiatives.
posted by Ed Morrison |
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Midwest states push venture capital
