The governor of Pennsylvania has launched a new program to help attract venture capital to the state’s emerging companies, including those in the life sciences field. The New PA Venture Capital Program is part of Governor Edward Rendell’s $2.8 billion “Economic Stimulus Plan,” designed to bring new businesses and jobs to the region. Under the new venture capital program, state government is fronting $60 million in loans to VC managers. The idea is that VC firms, inspired by the state’s upfront effort, will invest — at a three-times higher rate — in local companies, generating $180 million in private equity and $240 million in total investment.
“With these investments, Pennsylvania is breathing life into entrepreneurs’ innovative ideas,” said Governor Rendell. “This stimulates growth in new technologies, creates jobs and helps us to continue providing the necessary funding that will help these emerging companies grow and succeed in today’s competitive marketplace. We have established a strategy to close the funding gaps that often cause new emerging companies to falter.”
Although the new plan is more ambitious than prior state government efforts, Pennsylvania is not foreign territory for venture capitalists. In 2006, the National Venture Capital Association ranked the state sixth nationally for total investments made by venture capital firms.