In 2009, the Tennessee General Assembly began working with ECD Commissioner Matt Kisber and Revenue Commissioner Reagan Farr to craft legislation designed to increase the flow of capital to innovative new companies in Tennessee in the early stages of development. Initially proposed as a template of CAPCO legislation adopted by other states, policy makers in Tennessee decided to take a different approach in seeding small businesses with the capital needed to bring a new idea to the broader marketplace and create jobs in the process.
The result was the TNInvestco program, which allocated $120 million dollars in tax credits to a cross section of venture capital funds with broad experience in developing new companies in Tennessee. Those funds would market the tax credits to insurance companies which would purchase the credits with capital reserves and the venture funds would use the capital to help Tennessee companies grow. Reporting requirements and audits by the Tennessee Office of the Comptroller were put in place to provide oversight.
The goals of the program are to develop the entrepreneurial infrastructure across the state, to attract new capital to Tennessee and to diversify the state’s economy and create jobs through the development of “innovation clusters” which result in new companies being spun off.
A new website has been launched by ECD to help provide more information about the program and how it may benefit economic development opportunities in your community. The website may be found at http://www.state.tn.us/ecd/tninvestco/.
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