Program Models

Innovation-based economic development strategies require a long-term commitment, for program outcomes are realized over 10-15 year investment cycles. However, state and local governments have served as laboratories for innovation with various capital formation experiments, and practitioners today can learn from recognized best practices and a principles-based approach to good policy-making. Examples of government-supported programs that align with private market principles include:

Invest Maryland

InvestMaryland is the largest venture capital initiative in the state's history, designed to plug a financing gap between seed-stage and growth-stage ventures in Maryland. The program raised $84 million from the sale of $100 million of deferred tax credits, with the capital proceeds split between a direct investment fund and fund-of-funds strategy.

innovate in pa

Innovate in PA addresses the financing needs of technology-oriented businesses by increasing risk capital accessibility. The program was capitalized by the sale of $100 million of deferred tax credits to yield $85.5 million for investment. The capital is being deployed by the Ben Franklin Technology Partners, the Life Science Greenhouse and through a fund-of funds program.

ssbci

The State Small Business Credit Initiative (SSBCI) was created by the Small Business Jobs Act of 2010 and administered by the U.S. Department of Treasury. SSBCI was originally funded with $1.5 billion to strengthen state small business financing programs. The American Rescue Plan Act of 2021 reauthorized and expanded SSBCI with $10 billion in funding support, of which $3B is allocated to equity investing.