NJ proposes $500 million venture capital fund
Inclusive workforce development, downtown revitalization, and an influx of funds for venture capital are among the proposals in an economic development strategy unveiled by New Jersey Gov. Phil Murphy earlier this week. In an effort to focus on bottom-up development rather than a package of tax incentive programs favoring big businesses, the strategy seeks to build the nation’s “most diverse and inclusive innovation economy.”
Perhaps the most notable proposal included in the plan is the creation of a $500 million New Jersey Innovation Evergreen Fund (IEF). Developed over a five-year period, roughly half of the funds for the IEF would come from an auction of tax credits to New Jersey corporations. Private venture capital firms hoping to do business with New Jersey startups would match the remainder of the fund, and any company receiving investments through the IEF will need to be based in New Jersey.
The auction would sell tax credits for roughly 90 cents on the dollar, offering companies a tax break and diverting the tax revenue to the new fund. While developing the fund is within the purview of the state’s Economic Development Authority, auctioning the tax credits requires legislative approval. However, the governor is optimistic he will have support, according to The New York Times.
The IEF is a key component of the plan’s innovation agenda, called NJ Innovate. Other elements of this plan include expanding a program that makes incubator and co-working spaces more affordable for startups, providing gap financing to create more collaborative workspaces, and working to embed university researchers into these spaces. A pilot program would partner with suburban communities to plan for the repositioning of assets like office parks and malls to work better in the innovation economy. Other programs include NJ Talent, a comprehensive suite of talent retention and workforce development programs, such as STEM education, internships, apprenticeships, and job training initiatives. The plan also touches on the importance of renewable energy to economic development, especially opportunities in offshore wind energy and solar power.
New Jerseystrategic plan, venture capital