With current economic incentive programs set to expire on June 30, Gov. Phil Murphy and others today outlined details for the proposed New Jersey Innovation Evergreen Fund (NJIEF), one of five incentive program “pillars” aimed at growing the state’s innovation economy.
The NJIEF concept would entail making about $500 million in venture capital monies available for investment into promising startups, with $250 million generated “by competitively auctioning state tax credits to New Jersey corporations over five years” and then combining those proceeds with at least another $250 million from venture capital firms. Of note, those companies that purchase tax credits would also be committed to providing networking and support, for example, to NJIEF recipients.
Gov. Murphy said, “We will follow the lead of our venture capital partners to ensure we focus on the businesses with the best plans for growth. Returns to the fund – by the way – would be reinvested to help grow other New Jersey-based startups. If we do this right, additional returns could also be reinvested throughout the state budget, in things like public education, NJ TRANSIT, and in infrastructure, generally.”
New Jersey Economic Development Authority (NJEDA) CEO Tim Sullivan elaborated, “… Money is important, but these are high-value, strategic dollars that this Evergreen Fund would have to invest, because they would be tied to – and come with – partnerships from large corporations.
“If you are a young biotech company and you have the opportunity to work with New Jersey’s great roster of large pharma companies, that is a huge competitive advantage … the opportunity to partner, for young companies, is enormously powerful. It is a real distinction between what other [states] may have to offer.”
Gov. Murphy noted that innovation ecosystems in places like Northern California, Boston and New York are not only expensive, but, in some cases, “running out of space.”
He also said that in 2007, New Jersey ranked 5th in the nation for venture capital investments, but it has now dropped to 15th.
Gov. Murphy added, “[If you are] out of the top five, you might as well be last, and we needed a big idea to try to crack the code. So, we worked hard to come up with this proposal that we think is a big deal; it is a game changer.”
He added, “We want to have the entrepreneurs – frankly, students – go to college here, graduate from here, stay here, birth businesses, grow those businesses, grow up, grow old, grow successful.”
The EDA’s Sullivan added that phone calls inquiring about the proposed fund have already been received from as far away as California and Europe.
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