Another failed venture for Illinois governor – "Fund of Funds" not meeting expectations

Blagojevich’s plan is modeled loosely on the "fund of funds" approach pioneered in Oklahoma, in which the state solicits money from banks to reinvest in venture funds, which in turn invest in businesses.

Strike three for Blagojevich’s capital plan

Bringing $200 million worth of state-guaranteed venture capital to downstate Illinois was a cornerstone of gubernatorial candidate Rod Blagojevich’s 2002 economic platform.

But more than two years and three spring sessions of the General Assembly later, Gov. Blagojevich has been unable to deliver.

Venture capital, also known as "risk capital," is a phrase used to describe investments in new businesses that are considered too risky by banks and other traditional lenders. More often than not, venture capital finds its way into high-tech ideas.

Nationwide, venture investing peaked in 2000, with more than 7,800 deals for a total of $105 billion, according to the National Venture Capital Association Web site. Since the dot-com stock market bubble burst, however, venture investment has declined dramatically – 2004 saw only $21 billion invested in fewer than 2,900 deals.

Blagojevich’s plan is modeled loosely on the "fund of funds" approach pioneered in Oklahoma, in which the state solicits money from banks to reinvest in venture funds, which in turn invest in businesses.

By BRIAN MACKEY
STATE CAPITOL BUREAU

Full Story: http://www.sj-r.com/Sections/News/Stories/58166.asp

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State pension fund dollars trickle into venture capital

Slow progress stifles bids to lure start-ups

By Marcia Heroux Pounds
Business Writer

When venture capitalists gathered in Coral Gables last year and heard the state’s plan to invest in venture capital, there was excitement among South Florida VCs and the burgeoning biotech community.

A wide range of investment was initially discussed. Currently, Florida’s pension fund is committed to investing $500 million in venture capital and other "alternative" investments, said Coleman Stipanovich, director of the State Board of Administration, which oversees Florida’s pension fund.

The announcement was made during the euphoria over the decision by The Scripps Research Institute to open a branch in South Florida. The thinking was that the promised money would help jump-start venture capital investments, especially in biotech companies. VC money is seen as the critical lifeblood for the start-ups that could eventually turn Florida into a biotech hub.

Full Story: http://www.sun-sentinel.com/business/local/sfl-sbventure12jun12,0,2670061.story?coll=sfla-business-front