Innovation Finance Program

LD 1 "An Act To Stimulate Capital Investment for Innovative Businesses in Maine" has moved through the Legislature's Business, Research, and Economic Development Committee with an "Ought To Pass" recommendation.

LD1 has been passed by both the Maine House and Senate! This is exceptional news; but in a previous session this bill received an "Ought To Pass" recommendation, was approved by both the House and Senate...yet suffered a Pocket-Veto by the Governor.

There is still work to be done before this bill is enacted into law; We took action, now there is - One More Step!

WHY THE INNOVATION FINANCE PROGRAM:

• Drive Maine’s level of venture capital investment higher
• Attract attention of top venture funds: Maine continues to be a flyover State
• Create a more fertile private funding environment for commercialization of Maine’s R&D efforts without burdening the State’s tax revenue

BENEFITS: More money for more Maine companies!!

• Stimulates the availability of funding for innovative companies
• Increases the State’s venture capital (VC) culture and infrastructure
• Increases the number of jobs in high-growth, knowledge businesses
• Elevates the profile of innovative Maine companies
• Creates a competitive investment market in the state
• Leverages investment funds through syndication
• Supports commercialization of R&D efforts
• Matched to State economy

THE PROGRAM:

The purpose of the Innovation Finance Program is to attract more venture capital to innovative Maine businesses. The program provides the Maine Public Employees Retirement System with an incentive to invest in high-quality venture capital funds that evidence both a commitment to seeking Maine investments and the ability to produce favorable returns to minimize the risk of tax credit redemption. This program will increase the supply of venture capital by improving access of innovative Maine businesses to venture capital funds.

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 Innovation Finance Program 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. This program 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.

Legislative Detail For:
LD 1 (SP 10)
"An Act To Stimulate Capital Investment for Innovative Businesses in Maine"
Sponsored by Senator Peter Mills