State Governments: The Latest Venture Capitalists

“With venture capital firms scaling back, state goernments are stepping in to fund early-stage, high-risk startups.”

Now more than ever, states are playing the part of venture capitalist — and despite the recession, it turns out they’re uniquely suited for the role. As the recession froze private-sector investment, venture capital firms began avoiding early-stage deals, saving their money for less risky, later stages of development. That created a void. Governments began to realize they could fill the gap by providing seed money to new startups in all sorts of emerging industries, from biotech and health care to nanotechnology and solar power. [Full article; Governing]

OhioThirdFrontier Innovation Program [web]
InvestMaryland Proposal [Full article; Baltimore Sun]
Michigan Pre-Seed Capital fund [web]
National Association of Seed and Venture Funds [web]

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