Announces InvestMaryland Proposal to Revitalize Early-Stage Venture Capital Competitiveness
ROCKVILLE, MD (June 1, 2010) – Governor Martin O’Malley today announced InvestMaryland, an administrative and legislative proposal designed to support the growth of the state’s knowledge based industries by stimulating investment in the Maryland Venture Fund. The Governor unveiled his proposal during a key note speech to 350 business, academic and government leaders at the 2010 State of Tech in the I-270 Corridor conference at the Universities at Shady Grove Conference Center.
Held for the first time last year, this annual conference sponsored by Bisnow, a national interactive media and events company, convenes business, government and academic leaders to discuss the challenges and opportunities to strengthen the state’s significant number of life science, bio tech and pharmaceutical companies along the I-270 corridor. More than 11,000 people work in life sciences and approximately 35,000 people work in high tech sectors like IT, telecom and cybersecurity in the hundreds of businesses in the corridor known as DNA Alley.
“Today we’re announcing an administrative and legislative initiative we call InvestMaryland, aimed at creating a public-private partnership to fuel venture capital investment in our Innovation Economy, such as Maryland bioscience companies,” said Governor O’Malley. “We believe this initiative can spur the creation of thousands of jobs and secure $100 million in venture capital to unlock hundreds of millions and perhaps billions in economic activity.”
Governor O’Malley continued, “One of the many effects of the national recession is the drying up of venture capital – and that’s something we are determined to counter. It will come as a shock to no one in this room our life sciences sector saw a 26% decrease in venture dollars during the first quarter of this year. Our State ranks first among states in federal research and development dollars per capita, and second in the total amount we receive annually. It must be our goal to convert more of these dollars into jobs and economic opportunity. Venture capital, as we all know, is a key ingredient.”
Maryland Department of Business & Economic Development Secretary Christian Johansson said, “This program will make insurance companies eligible for state issued tax credits and in turn they would invest dollars today in Maryland’s venture infrastructure. A minimum of half these investments will flow into the Maryland Venture Fund and the balance will flow into Maryland based venture capital firms for the purposes of getting critical capital to businesses so they can create jobs and advance innovation in fields like biosciences and nanotechnology.” The Department will work with legislators, businesses and universities to draft a bill on behalf of the Governor for the 2011 Maryland Legislative Session.
Created in 1997, the Maryland Venture Fund has invested $51 million in more than 200 Maryland companies and these investments have yielded $61 million in returns. Life science companies experienced a 26% decrease in venture capital dollars in the first quarter of 2010; InvestMaryland could spur the creation of thousands of jobs and secure $100 million in venture capital to unlock hundreds of millions in economic activity.
“Having participated in the management of two early-stage Venture Capital firms located in Maryland (both invested on a regional basis) and two venture-backed companies headquartered in Maryland over the past twenty-seven years, I have experienced first hand the beneficial impact that having early-stage funds available at the right time can have on growing successful companies and jobs in Maryland,” Steve Dubin, CEO of Martek and co-chair of MEDC stated. “I have personally witnessed and participated in the funding of such Maryland-based companies as the Discovery Channel, Martek Biosciences, Digene, Cylex and Chesapeake PEARL. Maryland is a fertile area for venture funding of early-stage companies. We have more and more experienced entrepreneurs and a number of high-quality business incubators around the state.”
In the past year, the O’Malley-Brown Administration has implemented an aggressive agenda of new and expanded programs to create jobs, retain jobs and improve the conditions that allow businesses large and small to create and save jobs. During his remarks, the Governor provided an update on his administration’s efforts including: Increasing the biotech tax credit to $8 million in fiscal year 2011; pioneering the Jobs Creation and Recovery Tax Credit; and expanding the Small Business Loan Guaranty program to increase access to credit.
Maryland’s economy continues to emerge from the national recession faster and stronger than other states. In April, the state’s unemployment rate dropped to 7.5 percent, 24 percent below that national rate of 9.9 percent. The addition of 8,200 jobs last month and approximately 36,000 jobs over the last 3 months marks the highest jobs gain for Maryland in at least 20 years.
Other speakers at the conference included David Mott, Partner, New Enterprise Associates, Darryll Pines, Dean, University of Maryland, Clark School of Engineering,Tom School, General Partner, Novak Biddle Venture Partners, Todd Gibby, CEO Intelliworks, Renee Winsky, CEO, Technology Council of Maryland, Martha J. Connelly, Director, Maryland Industrial Partnerships, Jonathan M. Redgrave, Partner, Nixon Peabody, LLP and Craig Hunter, Partner, Cherry, Bekaert & Holland, LLP.