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VC News
With the goal of creating new access to venture capital (VC) for area businesses, Arizona and Montana are investing up to $50 million into a “fund of funds” concept. Both states are undertaking this multi-management model with the hopes of luring high-tech start-up companies. Their efforts are described in further detail below.
Arizona
The State Compensation Fund (SFC) announced its pledge to invest up to $25 million in a “fund of funds” concept to help make venture capital more accessible to high-tech start-up businesses in the state. The Knowledge Capital Fund will strive to raise $100 million to invest in private venture capital funds, which then invest in Arizona firms magnifying the state’s competitive position in the global marketplace, according to SCF. The structure of the fund is still being considered, according to an Associated Press article. However, it is intended to be a purely private-sector venture that does not rely on state appropriations or tax credits.
Montana
The Board of Investments will invest $25 million with Credit Suisse First Boston in a “fund of funds” project to increase investments in regional venture capital funds. Credit Suisse will be required to raise an additional $15 million to $50 million for regional investments focusing on Montana, Idaho, Utah and Eastern Washington. The idea for the fund evolved from legislation developed in 2003 to create a private, professionally run venture capital fund in which institutional investors could invest, according to State Auditor John Morrison.