Monday, June 16, 2003

Here's a dumb idea for a venture fund

While I've had good words for some government venture efforts, since the CIA and Army both have the need for high-tech and offer real markets, I can't say it for this one. Seems there's something called the New Homestead Act kicking around in Congress, that among other things will:

Establish a $3 billion venture capital fund to invest in businesses in high out-migration counties.
Out-migration counties, if you didn't follow the link, are rural areas where the people are voting with their feet for the bright lights of the city. What's wrong with venture style investing there? Well..
  • By definition they don't have the diverse and highly educated employee pool needed for innovation.
  • They lack the financial infrastructure and experience necessary to nurture venture type companies.
  • The businesses they need to remain viable communities are exactly the kind of cash-flow, service oriented businesses that venture can't touch, because there is no exit model.
This isn't a venture fund. It's pork. You want to see the reason for it, look at the list of swing-voting states at the end of the linked article.
5:41:46 PM    

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