The Appropriations Committee heard testimony Feb. 19 on a bill that would establish the Development and Venture Enterprise Act.
LB1019, introduced by Columbus Sen. Paul Schumacher, would create a statewide entrepreneurship plan and provide venture capital to qualified businesses.
The bill would establish the Nebraska Venture Fund Authority, which would be housed within the state Department of Economic Development for administrative purposes. The nine-member authority would include a small business owner, a business executive and at least four members with experience in raising venture capital or providing professional services to the venture capital industry.
The fund – which would consist of a one-time, as yet undetermined, appropriation from the Legislature and funds raised from private investors – would be used to make investments in qualified businesses. If a minimum amount of private investment were not raised, the fund would be dissolved.
Schumacher said the specific amount of general funds and the minimum level of private investment were “subject to negotiation,” but that it would need to be enough to entice private investors to join the project. Many Nebraskans have money to invest, he said, but the state lacks a large pool of organized capital for them to consider.
“We’ve got some problems in Nebraska, because we do not have a good investment vehicle to take all the money that’s out there and organize it to dispatch it for corporate acquisitions or to invest it in entrepreneurial activity,” Schumacher said.
Renee Fry, executive director of the OpenSky Policy Institute, testified in support of LB1019. Nebraska ranks low in access to venture capital, she said, which is essential for start-up companies. The bill would provide an incentive to invest in Nebraska companies and create jobs, she said.
“An investment in venture capital would do more for economic growth than cutting taxes,” Fry said.
No opposition testimony was offered and the committee took no immediate action on the bill.