Red Herring: Florida Could Juice VC Activity

THis is something that I think the Singapore government should consider. Currently, the only program that is active in such activities is the EDB SEEDs and SEEDs II program, BUT the main difference is that EDB does not discriminate whether the investors are institutional VCs, angel investors, blur people or idiots, just so long as the investors are not directly related to the founders or management of the start-up.

Giving tax credit to institutional VCs will help start-ups more than giving matching funding to Angels, primarily, in the Singapore context, IMHO, angel investors are not really angels and have unrealistic expectations of the start-up company and may end up hurting the very company they hope to make money from.

I also belive that TIF may have similar terms and conditions that they put into the fund they invest in, but word on the street is that TIF is currently not a very active participant. Hopefully I am wrong and TIF continues to encourage local VCs to invest locally.


From the Red Herring:

Florida Could Juice VC Activity

Legislation would encourage funding to back the state’s startups.
December 26, 2006

By Ken Schachter

Florida lawmakers are hoping a 2007 legislative lift will open the venture capital spigot to the state’s early-stage companies.

Though the session won’t start in earnest until March, lawmakers already are in talks to revive legislation designed to encourage venture capitalists to fund startups.

Sen. Evelyn Lynn said talks have begun to shape the language of new legislation designed to remedy the dearth of venture capital in the state.

One approach, she said, would seek to commercialize intellectual property emerging from the state university system.

“We’re talking about a lot of different things,” added the Daytona Beach Republican.
In 2006, Lynn co-sponsored legislation that would have provided $75 million in tax credits as backing for the Florida Opportunity Fund, a venture capital “fund of funds” to support state businesses and technologies.

In his 2006 budget proposal, Gov. Jeb Bush endorsed such a fund, noting that Florida accounted for only 0.3 percent of the nation’s seed financing, 1.2 percent of early stage funding and 1.4 percent of venture funding in 2004. Total state VC spending for 2003 and 2004 was more than $555 million on 114 deals, according to Enterprise Florida.

Though Bush will be leaving the governor’s mansion in 2007, his successor, Gov.-elect Charlie Crist, was a co-sponsor of the bill to create the Florida Opportunity Fund and is expected offer continued support. Under that plan, the state set aside $75 million in contingent tax credits as a guaranty for investors. Arkansas, Iowa, Michigan, Ohio, Oklahoma, South Carolina and Utah offer similar programs backed by tax credits.

The legislation would have mandated that VC funds receiving investments from the Florida Opportunity Fund put an equal amount of their own capital into Florida startups. The fund was designed to seek to withdraw its investments in portfolio companies within three to five years.