On February 16th entrepreneurs and business interests convened in Annapolis to show of support for the InvestMaryland bill. The legislation, spearheaded by Governor O'Malley, would act as a fund for state investment into the startup economy.
The bill would allow insurance companies to forward-pay their tax liabilities at discounted rates and thereby replenish the Maryland Venture Fund. The hundred-million dollar fund would then be invested as venture capital into Maryland startups. In his testimony, O'Malley said this fund would "help our businesses create thousands of jobs, injecting hundreds of millions of dollars into Maryland's innovation economy."
The legislation addresses a disparity between Maryland's economic potential and its available investment capital. "Great research, great technology, great innovation but we rank very low when it comes to availability of venture capital. So InvestMaryland is an effort to get venture capital flowing," said O'Malley.
Panel member David Troy said, "One of the great things about this bill is it will provide opportunities for parallel and future private investment and that's terrific. Anything that can prompt investors to get into the market is great in my book."
Questions, however, remain regarding the best methods of the fund's allocation. "The Department of Business and Economic Development has indicated a preference not to segment it, and I agree with that decision. There is no reason to create legislative lock-in for one sector vs. another; that would only serve to limit emerging opportunities," said Troy.
Mike Brenner co-organizer of Startup Baltimore said about the allocation, "I think the bill is great for small startups as long as it's distributed amongst a large number of businesses. I'm not really in favor of seeing $30 million of this fund go right to one company."
Writer: Ryan LeRoy Kleeberger
Sources: David Troy, Mike Brenner, Karl Gurntow, Governer O'Malley, Christian Johansson, The Milken Institute