Maine needs additional financing vehicles to attract new companies and ideas and to
fund and retain our current entrepreneurs. TechMaine has proposed the creation of a bold
new capital resource initiative in Maine to build an investment pool of $80,000,000 for
private equity investment in emerging technology start-ups and ideas. Iowa, Ohio,
Oklahoma, Arkansas and most recently Utah have successfully executed these initiatives
without seeking tax revenue. Maine can secure a competitive advantage in New England
by implementing a Fund of Fund investment vehicle.
Building on Maine-Based Funding Opportunities to Advance Technologies
The Finance Authority of Maine (FAME) created the Venture Capital Revolving
Investment Program (VRIP) in the mid 1990s. The VRIP is a private equity resource
based on the Fund of Funds concept and was conceived to bring capital to early-stage
companies. Equity investment in young technology ventures is further rewarded through
the Maine Seed Capital Tax Credit Program. This program authorizes income tax credits
on cash equity provided to Maine businesses.
The Small Enterprise Growth Fund (SEGF), has provided millions of dollars in venture
capital to innovative Maine businesses. SEGF requires recipients to provide matching
funds, which leverages significant private capital.
The Maine Technology Institute (MTI), was founded in the late 1990s to make grants and
investments of varying size that focus primarily on the development cycle of new
technologies. MTI has been successful in funding the full spectrum of Maine’s
technology sectors.
The Fund of Funds builds on the foundation created by these previous initiatives and will
significantly impact the capital markets in Maine. With increasing investments in R&D,
we need to ensure the availability of funding that will be put to work in the
commercialization of the results from R&D activities. The Fund of Funds concept is a
proven program in other states and on a smaller scale has been successfully tested in
Maine.
Capital is a critical tool in building new technology companies. The Fund of Funds will
stimulate funding for technology innovation by leveraging private money. This initiative
will fill the funding gap and enable companies to stay and grow in Maine without a direct
investment of public dollars.
