Legislators in Jefferson City have started work on a framework for a state-run $250 million venture capital fund to invest in startups based in Missouri.
The fund, called the Missouri Innovation Fund, would be created under Senate Bill 1037. The bill was one of several recommendations made last year by a task force commissioned by Gov. Eric Greitens to boost entrepreneurial activity in the state.
The amount of venture capital investments in Missouri last year dropped to a five-year low of $147 million, according to a PricewaterhouseCoopers report.
The new fund would leverage the state’s credit rating and bonding authority to attract private venture capital with the goal of investing more than the state has through the Missouri Technology Corporation.
The fund has been described by Drew Erdmann, the governor’s chief operating officer, as “MTC version 2.0.”
The MTC has helped Missouri startups raise funds — often through matching outside investments up to $2.5 million — since 2011.
About 100 startups have used $30 million in MTC funding to secure an additional $500 million in investments, according to the U.S. Department of Treasury. Those startups have created over 1,200 jobs.
However, the MTC has been marred by substantial budget cuts, which limited its ability to invest in startups. The MTC has invested just $2.3 million into 13 startup deals in fiscal year 2018, down from $10 million into 42 deals in fiscal year 2017.
Read more: St. Louis Post-Dispatch