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Strama visits City Hall to boost state’s Emerging Technology Fund
Wednesday, February 3, 2010 by Josh Rosenblatt
City Hall connected with the State Legislature on Tuesday when Austin State Rep. Mark Strama stopped by the City Council’s Emerging Technology and Telecommunications Committee meeting to give a presentation called “Challenges and Opportunities for Emerging Technology in Texas.”
Strama, the Democratic representative from District 50, visited the committee in his capacity as chair of the Legislature’s Technology Economic & Workforce Committee. He spoke primarily about the state’s Emerging Technology Fund (ETF) and the impact it has had and can continue to have on Austin’s economy.
The ETF, Strama told the committee, has been an enormous boon to Austin since it was started in 2005. The fund gives the state the opportunity to “invest in things that haven’t been able to attract funds in the private marketplace,” he said. “There are emerging technologies that aren’t ready for private investment yet but that hold enough promise of adding a lot of value to society and also having a big return on investment if they come.” He called these emerging technologies – which often come from the world of renewable energy and bio med – “potential game-changers.”
“As chairman of the committee,” Strama said, “the speaker that holds jurisdiction over this fund has asked me to review every investment that comes through for approval. Certainly we look at the viability of investment in terms of likelihood of a ROI (return on investment), but the other thing that makes me think an investment might be worth it even if they seem like pretty long shots is when there’s a huge social benefit if it does come in.”
Since the ETF’s inception, 22 companies in Central Texas have received $35 million dollars in investment capital, with another $22 million going to universities for talent searches and another $6 million going to research. In addition, six companies are currently in the pipeline to receive funds, accounting for $12 million more.
Austin is second only to Dallas/Fort Worth among Texas cities in terms of percentage of funds dispersed, with 22 percent thus far going to city companies.
That means a stronger local economy, better infrastructure, and more jobs, Strama told the committee.
When the ETF was begun, legislators split the state into seven regions and called for the creation of individual Regional Centers for Innovation and Commercialization (RCIC’s) to oversee the application and selection process for companies applying for funds in each particular region. ETF investments are generated and vetted at the local level by these RCICs.
Susan Davenport, the vice president of business retention at the Austin Chamber of Commerce and the program manager of the Central Texas RCIC, also spoke at Tuesday’s meeting, at the request of Rep. Strama.
“We (the RCICs) act as the eyes and ears and hands of the statewide ETF fund for the 15 counties that make up the Central Texas region,” Davenport told In Fact Daily. “We deal with intake and selection, and we provide assistance to small, young companies and help them either get ETF funding or help them find other forms of investment.
“Anyone who applies, we bring them into the fold. We want to provide activities and resources to help them and plug them into a network of investors and surround them with expertise,” so that even companies that don’t end up receiving ETF funds are connected to the Central Texas small-business community.
After the presentation, Council Member Laura Morrison asked Strama and Davenport what the Emerging Technology and Telecommunications Committee could do to support RCIC and the ETF. Davenport told her that the focus should be on getting the word out.
“The main thing is to increase awareness,” she said. “We have such a great entrepreneurial culture and Austin has been such a desirous place to grow companies. We need to be sure there are opportunities to capitalize on the ETF program. Make sure that entrepreneurs find this tool so we don’t lose out on an opportunity to create a new company that will create jobs and keep them in the area.”
Morrison, who chairs the committee, agreed. She told In Fact Daily, “We need to get the word out to make sure people are familiar with ETF, both small companies that are not quite mature enough for venture capital and potentially game-changing companies that haven’t proven their worth yet. Obviously, we’re very interested in leveraging state funds from ETF to Central Texas.”
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