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Coalition Applauds State’s Effort to Promote Economic Development Public-private programs stimulate capital flow

Austin, Texas-March 27, 2007 A leading state coalition focused on connecting Texas entrepreneurs with long-term sources of capital is applauding the efforts of state officials to stimulate economic development, attract new companies to Texas, and keep promising emerging companies and jobs at home.

Recent media reports indicate that venture investment in Texas is at levels not seen since the dot-com era. This time, the whirl of entrepreneurial action is being seen in alternative energy, data centers, medical devices and a variety of technologies. These reports, based on data from the top financial firms, reveal private investors poured more than $1.2 (B) billion dollars into Texas companies last year.

“The Enterprise Fund, the Texas Emerging Technology Fund and Certified Capital Company (CAPCO) program leverage the private equity that is being invested and is a key reason that Texas has been recognized as the best business climate in the country the last two years, “ said Craig Casselberry, president of the Texas Coalition for Capital, a statewide non profit organization. “Private equity investment increased by 17 percent in Texas from 2005 to 2006. Compare that to a national increase of 8 percent and you see that Texas is a pacesetter in attracting venture investment and generating deal flow.”

The Texas Emerging Technology Fund (TETF) and the Certified Capital Company (CAPCO) program fund early stage investments. To date, the TETF has allocated $73.4 million dollars to Texas companies and partnering universities. The CAPCO program has invested $52 million dollars in 32 companies, helping to retain 506 jobs and create an additional 190 new jobs in the state.

“These programs are symbolic of how the public and private sectors can collaborate to stimulate job growth. They get capital into the hands of our promising early stage companies to keep those companies and their jobs in Texas,” Casselberry said.

Increasing research collaboration between public and private sector entities through the new Regional Centers of Innovation and Commercialization - created by the Legislature in 2005 as part of the Emerging Technology Fund - are allowing seeds of innovative new ideas to take root. These ideas nurtured in a university lab eventually grow into new product and attract top research teams from other universities around the nation that will help put Texas universities on the cutting edge of technology research and development.

“The Emerging Technology Fund has provided another source of capital. It has also created an infrastructure for our emerging companies to get their business plans in front of high-tech leaders and experienced entrepreneurs for review, which in turn can attract private equity. Over time, the result will be an excellent return on investment for Texas taxpayers,” said Austin lawyer Pike Powers, a member of the Coalition Board of Directors and the Emerging Technology Fund Advisory Committee.

"These programs provide direct investment of capital, but also what we call leverage value from the state’s participation,” said Tom Kowalski, Coalition Chairman and president of the Texas Healthcare and Bioscience Institute. “There is tremendous residual benefit as a result. One program can feed off another, and provide some early diligence so that private investors can step up with additional capital to grow these companies in Texas. The Governor and the Legislature should be applauded for their leadership in this area.”