Innovation Finance Program

The Details

TechMaine, other Industry Groups and many individuals involved in the formation of new, high growth firms, supported the bill to strengthen Maine’s high growth economy.

The Fund of Funds is now the Innovation Finance Program:
The Innovation Finance Program will invest in high quality, professionally managed venture firms who have made a commitment to consider equity investments in businesses located within the state.

Maine’s Opportunity:
To help strengthen and reignite Maine's high growth economy by stimulating the availability of venture capital and the range of “investment themes” to increase the number of young companies that will grow into large, vibrant businesses headquartered in Maine that will create jobs and help to diversify the state’s economic base.

Maine’s Challenge:
Maine’s young companies have seen available venture capital disappear, falling from a high of $27 million invested in Maine firms in the first quarter of 2001, to being labeled in late 2006 as one of the five worst states in the country for technology start-ups based on a report by PricewaterhouseCoopers.

Maine's Answer:
This legislation attracts experienced venture capital funds committed to working with and investing in Maine high growth ventures.

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.

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