Bill Text: FL S1730 | 2011 | Regular Session | Introduced
Bill Title: Technology Seed Capital Fund
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2011-05-07 - Indefinitely postponed and withdrawn from consideration [S1730 Detail]
Download: Florida-2011-S1730-Introduced.html
Florida Senate - 2011 SB 1730
By Senator Altman
24-01320C-11 20111730__
1 A bill to be entitled
2 An act relating to the Technology Seed Capital Fund;
3 providing definitions; providing for the creation of
4 the Technology Seed Capital Fund by the Institute for
5 the Commercialization of Public Research; providing
6 for the creation of a fund management committee by the
7 board of directors of the institute; forbidding
8 members of the committee from investing in a company
9 for a specified period after an investment in a
10 company is approved; specifying responsibilities of
11 the institute and the fund management committee with
12 respect to the fund; specifying the requirements for
13 an investment management plan proposal from interested
14 applicants for the investment manager position;
15 specifying the authority of the investment manager for
16 the fund; specifying qualifications for investments of
17 the fund; requiring that proposed investments be
18 matched by the private sector before the fund invests;
19 requiring that the company be domiciled in the state
20 and operate in one of the targeted industry clusters;
21 requiring that the company have certain positions and
22 abilities; limiting the amount of individual
23 investments of the fund; requiring earnings from the
24 fund to be reinvested; limiting the administrative
25 costs of the fund; requiring the institute to submit
26 an annual report to the Governor and Legislature
27 relating to the activities of the fund; providing an
28 appropriation; providing an effective date.
29
30 WHEREAS, consistent access to significant risk capital at
31 all stages of development is integral to the creation and growth
32 of small technology companies, and the maturation of these
33 companies into the leading companies of tomorrow will facilitate
34 the diversification of Florida’s economy, and
35 WHEREAS, young companies have little to no collateral with
36 which to secure traditional loans and limited assets and track
37 records with which to attract financing from private equity
38 firms, and
39 WHEREAS, this state is not the natural home of the venture
40 capital industry, and as a result, companies in this state are
41 severely disadvantaged in their efforts to attract venture
42 capital investment, and
43 WHEREAS, a lack of seed-stage funding exists in this state
44 despite the fact that the leaders of this state have recognized
45 the venture capital challenge and in recent years have taken
46 significant action to help address it, in particular through the
47 creation of the Florida Opportunity Fund and the Florida Growth
48 Fund, and
49 WHEREAS, to date very little capital is available to
50 companies in this state in the crucial seed stage, and
51 WHEREAS, the 2010-2015 Roadmap to Florida’s Future called
52 for the creation of a new mechanism for seed-stage funding to
53 address the state’s seed stage capital gap as part of a
54 comprehensive strategy to promote high-tech, high-wage,
55 innovation-driven growth, and
56 WHEREAS, broad-based support exists among the state’s
57 economic development, business, and academic leaders for the
58 creation of a Florida Technology Seed Capital Fund, and
59 WHEREAS, it is recommended that the state make a $25
60 million investment to establish a Technology Seed Capital Fund,
61 NOW, THEREFORE,
62
63 Be It Enacted by the Legislature of the State of Florida:
64
65 Section 1. Technology Seed Capital Fund; creation; duties.—
66 (1) DEFINITIONS.—As used in this section, the term:
67 (a) “Fund” means the Technology Seed Capital Fund.
68 (b) “Institute” means the Institute for the
69 Commercialization of Public Research.
70 (2) TECHNOLOGY SEED CAPITAL FUND.—
71 (a) The institute shall facilitate the creation of the
72 fund. This fund shall be a private, nonprofit corporation
73 organized and operated under chapter 617, Florida Statutes. The
74 institute shall be the fund’s sole shareholder or member. The
75 fund is not a public corporation or instrumentality of the
76 state. The fund shall manage its business affairs and conduct
77 business consistent with its organizational documents and the
78 purposes set forth in this section. Notwithstanding the powers
79 granted under chapter 617, Florida Statutes, the fund may not
80 amend, modify, or repeal a bylaw or article of incorporation
81 without the express written consent of the institute.
82 (b) The board of directors of the institute shall direct
83 its venture advisory board to elect or appoint a five-person
84 fund management committee. Members of the committee shall serve
85 without compensation, but are entitled to reimbursement for all
86 reasonable, necessary, and actual expenses authorized under s.
87 112.061, Florida Statutes, and as determined and approved by the
88 board of directors of the institute. Members of the committee
89 may not invest in any company receiving funding from the fund
90 for 6 months after an investment in the company by the fund is
91 formally approved. The staff of the institute shall provide
92 administrative support and assistance to the fund management
93 committee upon request.
94 (3) FUND MANAGEMENT COMMITTEE RESPONSIBILITIES.—
95 (a) Upon organization, the fund management committee shall
96 conduct a national solicitation for proposals for investment
97 management plans from interested parties. The investment
98 management plan must address the applicant’s level of
99 experience, quality of management, investment philosophy and
100 process, proof of success in fund management and fundraising,
101 prior investment fund results, and plan for achieving the
102 purposes of this section.
103 (b) The fund management committee is responsible for
104 negotiating the terms of the contract with an investment manager
105 for the fund and for recommending the execution of the contract.
106 (c) The fund management committee must consult with the
107 board of directors of the institute before recommending the
108 pursuit of any investment management plan proposal or the hiring
109 of an investment manager for the fund.
110 (4) RESPONSIBILITIES OF THE INSTITUTE.—The board of
111 directors of the institute shall be responsible for managing the
112 business affairs of the fund, such as accounting, audit,
113 insurance, and related requirements; soliciting and negotiating
114 the terms of, contracting for, and receiving investment capital
115 and proceeds with the assistance of the investment manager;
116 receiving investment returns; paying investors and debtors; and
117 reinvesting the investment returns in the fund in order to
118 provide additional seed capital to facilitate the creation of
119 new businesses and jobs in this state and further diversify the
120 economy of this state.
121 (5) FUND MANAGER.—For the purpose of mobilizing investment
122 in Florida-based, new technology companies and generating a
123 return sufficient to continue reinvestment, the investment
124 manager of the fund may:
125 (a) Deploy the fund to make direct investments in
126 individual businesses;
127 (b) Negotiate any and all terms and conditions for
128 investments of the fund;
129 (c) Track progress of the companies in the fund’s
130 portfolio; and
131 (d) Increase the visibility of the companies in the fund’s
132 portfolio to help raise additional capital from private or
133 corporate sources.
134 (6) INVESTMENTS BY THE FUND.—
135 (a) The fund may not invest in a company unless:
136 1. The fund’s proposed investment in a company is matched
137 at least 1 to 1 by the private sector before the fund invests;
138 2. The company is domiciled in this state and is operating
139 in one of the state’s targeted industries as identified pursuant
140 to s. 288.106(2), Florida Statutes, which include, but are not
141 limited to, life sciences, information technology, energy, clean
142 technology, advanced manufacturing processes, aviation and
143 aerospace, and homeland security and defense; and
144 3. The fund determines that the company has strong
145 intellectual property positions, a capable management team,
146 readily identifiable paths to market or commercialization, the
147 ability to obtain other sources of capital to leverage the
148 state’s investment, and the potential to attract additional or
149 follow-on funding.
150 (b) Individual seed investments by the fund may range from
151 $30,000 to $300,000.
152 (c) Any earnings from the fund must be returned to the fund
153 to be reinvested consistent with the purposes of this act.
154 (7) ADMINISTRATIVE COSTS OF THE FUND.—The annual
155 administrative costs of the fund may not exceed 5 percent of the
156 total program appropriation, except that the fund may pay its
157 investment manager a carried interest.
158 (8) ANNUAL REPORT.—By December 1 of each year, the
159 institute shall issue an annual report concerning the
160 investments of the fund to the Governor, the President of the
161 Senate, and the Speaker of the House of Representatives. The
162 annual report, at a minimum, must include:
163 (a) An accounting of the amount of investments disbursed by
164 the fund and the progress of the fund.
165 (b) A description of the benefits to this state resulting
166 from the fund, including the number of businesses created,
167 additional capital raised, associated industries started, the
168 number of jobs created, and the growth of related research
169 projects.
170 (c) Independently audited financial statements, including
171 statements that show receipts and expenditures during the
172 preceding fiscal year for the personnel, administration, and
173 operational costs of the fund. Any returns on the investments of
174 the fund shall be retained by the institute and reinvested in a
175 manner consistent with the mandates of this section.
176 Section 2. The sum of $25 million in nonrecurring funds
177 from the General Revenue Fund is appropriated to the Institute
178 for the Commercialization of Public Research solely for purposes
179 of creating and administering the Technology Seed Capital Fund,
180 pursuant to this act.
181 Section 3. This act shall take effect July 1, 2011.
