ST. LOUIS (AP) — Gov. Eric Greitens says the state plans to start an innovation fund to support entrepreneurship efforts in Missouri.
Greitens mentioned the fund Thursday at an economic development conference in St. Louis. Under the plan, private fund managers would go through Missouri Technology Corp. to borrow state money, the St. Louis Post-Dispatch reported.
Missouri Technology Corp. is a state program that invested in early-stage companies until legislators slashed its budget this year.
The fund will only invest in companies with a Missouri presence. Fund managers could invest wherever they see the biggest potential return.
Greitens said he considers this strategy more advantageous than how Missouri Technology Corp. has operated because investment dollars would be committed for a long period of time and wouldn't be subject to legislative appropriations. A private manager could also be more efficient in responding to deals.
Missouri could generate more than $100 million for the fund if legislators agree to issue bonds and make debt payments at the same level it used to fund Missouri Technology Corp., said Drew Erdmann, the governor's chief operating officer.
Some people in St. Louis' startup community have said the proposed structure could create problems, such as regional rivalries. They say another potential problem is that a large, profit-driven fund is likely to move toward later-stage companies — those that have already created and tested their product or service and need money to expand.
"I believe we are in more need for seed investing, not later stage," said Brian Matthews, co-founder of Cultivation Capital. "Good late-stage companies find capital from Chicago and the coasts."
Greitens said he wants to rethink Missouri Technology Corp., and this year's budget cuts have led to fears that the new administration didn't support entrepreneurship efforts. Greitens said he hopes the new innovation fund would remove those fears.
State numbers show that Missouri attracted less than 0.5 percent of the nation's venture capital dollars last year.