The state of Michigan may soon get out of the venture capital business.
The state House Commerce and Trade committee takes up legislation tomorrow that would sunset a state program that has made hundreds of millions of dollars in tax vouchers available for investment.
In 2003, the state of Michigan set up a program aimed at attracting venture capitalists. The state would make tax vouchers available to banks. The banks in turn would make money available to venture capitalists. The venture capitalists would then spend the money to startup companies, preferably in Michigan.
More than $400 million in tax vouchers have been issued. It’s estimated the program helped create only about thousand jobs.
Now some state lawmakers think it’s time to get out.
State Representative Al Pscholka says the program has “not been a good investment.”
Pscholka says venture capital is a risky business and one government should not be involved in.