Janet Cowell: Creating our own venture capital

Nearly 20 years ago, I moved to the Triangle for one reason: I wanted to live close to universities and the smart, innovative climate that comes with them. There’s an entrepreneurial spirit in our state that, aligned with our institutions of higher learning and research, can provide many opportunities if we are forward-thinking.

Growing North Carolina’s economy and creating jobs will require innovation. We have a real opportunity to do that with the “Venture Multiplier Fund” proposal included in the N.C. House budget. I am partnering with Gov. Pat McCrory on this bipartisan, forward-thinking proposal.

We might have the next game-changing business right here. We have the talent, but our state continues to have a pressing need for venture capital. As The News & Observer reported recently, Triangle venture capital funding has improved, but our state as a whole could do better, and this drives many talented entrepreneurs elsewhere to seek funds and build tomorrow’s success stories.

This proposal would allow the Department of State Treasurer to invest a small portion (10 percent) of the state’s unclaimed property fund with a new Venture Multiplier Fund. Our department would focus on early-stage and smaller private-sector businesses. It frequently takes longer for these investments to generate returns, but those returns can be much larger when they come.

As the safe-keeper of the unclaimed property fund, I will continue to ensure that we protect the money while we work hard to reunite it with its rightful owners. The fund stands at $438 million, and we returned approximately $60 million of it to its owners last year.

North Carolina’s universities are well-known for their strong research, but there are underdeveloped opportunities to capitalize on that research. The Venture Multiplier Fund would create seed capital for these opportunities and stimulate commercialization of university technology innovations across the state. At the same time, the independent investment managers of this fund – chosen by a bipartisan board selected from across government – would bring together a new group focused on advancing entrepreneurial activity.

This collaboration with universities makes even more sense for another reason: Today’s investment earnings from the unclaimed property fund are the only dedicated money for vital student scholarships. Importantly, higher investment returns will grow the unclaimed property fund over the long term, expanding scholarship opportunities.

Identifying North Carolina’s homegrown investment opportunities, as the Venture Multiplier Fund would do, has been a priority since I took office in 2009. This same value underpins the two Innovation Funds I have established within the North Carolina pension fund. These allocations, between $230 million and $250 million, have a mission of producing competitive returns at responsible levels of risk by investing in the most innovative companies in North Carolina.

We have been through challenging times, but when I travel around the country North Carolina still brings to mind innovation, creativity and progress. We must preserve and build upon this strong foundation. The next Quintiles or CREE may already be developing in our universities. North Carolina should enact the Venture Multiplier Fund.

The length limit was waived.

This story was originally published July 25, 2015 at 2:00 PM with the headline "Janet Cowell: Creating our own venture capital."