House to invest less in Invest Maryland
Maryland would invest less in Invest Maryland under a revised plan moving through the House of Delegates. The House this morning began debating Gov. Martin O'Malley's proposal to leverage future tax dollars to invest in local start-up companies.
But the House Ways and Means Committee reduced the overall size of the program from $100 million to $75 million and downshifted the state's direct involvement. Under the new plan, the Department of Business and Economic Development would control one-third -- down from half -- of the investment money. The rest would go to private venture firms.
Delegates are to resume debate, and consider additional amendments, tomorrow morning. The Senate is also working its way through the bill with an eye toward changes. The two chambers would need to reconcile their plans before session ends Monday night.
O'Malley, a Democrat, pitched Invest Maryland as a way to spur jobs, innovation and economic growth, Sun technology reporter Gus Sentementes wrote earlier this year.
The Invest Maryland plan is designed to address a need among start-up businesses, which have trouble luring deep-pocketed venture capitalists. Young companies need start-up funds to experiment, to patent technologies, do market research and perhaps clinical studies — and it could be years before many see profits, or even revenue.
So there's greater risk in investing in newer, unproven companies, but that's where the state can play a key role, said Douglas M. Schmidt, CEO of Chessiecap Securities Inc., a Mid-Atlantic investment banking firm.