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Venture capital bill passes thanks to Lt. Gov. Cagle’s dogged persistence

The $100 million VC fund will soon become a reality

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A proposal that sets aside $100 million for the state to invest in potentially risky startup companies is now headed to Gov. Nathan Deal’s desk.

State representatives approved House Bill 318 yesterday by a 135 to 28 vote. The legislation, tacked onto what was originally a tax incentives bill, would create the Invest Georgia venture capital fund. It would allow an independent board to invest in Georgia-based technology startups over a five-year period.

In addition to overseeing the fund, five unpaid board members would also recruit additional private investors. The appointees - handpicked by the governor, lieutenant governor, and House speaker - would determine which startups received financial support.

The proposal could convince blossoming technology startups to remain in Georgia. It could also spur job creation across the state.

But critics are skeptical of the board’s actual independence. More importantly, they wonder if the state should even play a role in economic development when private investors adequately handle that role.

Lt. Gov. Casey Cagle, a staunch supporter of the Invest Georgia fund, has worked several different avenues to ensure that the $100 million fund becomes a reality. Those efforts included a stalled House bill sponsored by state Rep. Alan Peake, R-Macon, and a companion proposal pushed by state Sen. Tim Golden, R-Valdosta.

His cohorts ultimately added the wording onto a piece of tax incentives legislation called the Georgia Tourism Development Act that was close to passing. In addition, the upper chamber also earmarked $10 million from the state’s 2014 fiscal year budget.

In pulling out all the stops, Cagle and other venture capital fund backers guaranteed that this year’s bill would not fizzle out the way its larger predecessor did in 2012.