Perdue backs fund to help tech firms get started

Gov. Sonny Perdue on Tuesday endorsed the launch of a Georgia Research Alliance venture capital fund to provide early-stage financing for emerging technology companies.

The governor, who made the announcement at the Georgia Chamber of Commerce's annual Eggs and Issues Breakfast, is including $10 million in his budget for the fund. It would be matched by $30 million from the private sector. The $10 million appropriation has to be approved by the Legislature.

"The intent of the fund is to grow sustainable Georgia-based companies," said Mike Cassidy, the GRA's president. "The technology has to have been originated in one of Georgia's research universities."

The GRA is a public-private entity that invests in university research and encourages new technologies as a magnet for economic development. It created "Venture Labs" as a way to help very young companies that have grown out of the state's research universities to develop business plans and be prepared for commercial application of their technologies.

"We now have 60 embryonic companies, many now in need of a formal venture capital investment," Cassidy said.

Fred Cooper, a director of the GRA who also is chairman of Cooper Capital, led the effort for a new venture fund to help support emerging companies. Cooper said California has about half of all venture capital in the United States and Massachusetts has a large chunk.

"Georgia starts with a very limited amount of venture capital capacity," Cooper said. "Our reason for doing this is to encourage research and let the universities and their researchers know that there will be financing for their innovations. That will help create jobs."

Cooper said that if the new fund is approved by the Legislature during this session, he believes the fund could be running before the end of the year.

"We've got a pipeline of deals," said Cooper, who has already spoken to potential investors about the idea. "We are creating something that is needed today."

This is not the first time the GRA has backed a venture capital fund. In 1994, Alliance Technology Ventures was launched to invest in new Georgia technology companies.

"It was an idea that was ahead of its time," Cassidy said. "We didn't have the deal flow that we have today."

Cassidy said Alliance Technology Ventures ended up investing in companies that were based outside the state.

"It did provide a good return to its investors, but it was not doing what we had intended --- to invest in innovations in Georgia," he said.

In a release, the governor's office said the new fund will give special emphasis to companies specializing in life science technologies, especially in vaccines and anti-viral therapies.

The state and the private investors would receive an equity stake in these companies in return for funding the new enterprises.