Get the Public Sector Out of VC Investments

By Steve Poftak
April 29th, 2008

The Commonwealth has a bunch of pots of money lying around in various public and quasi-public entities that are supposed to ‘invest’ in various type of companies — technology start-ups, struggling manufacturers, etc.

No one has ever demonstrated that they make anything more than a tiny marginal impact on our economy and no one, absolutely no one, asks the “but for” question– if the money was spent elsewhere or, g-d forbid, returned to taxpayers, would it have a greater impact.

WBZ’s I-Team reports on the Emerging Technology Fund, a $50 million fund, and finds that it has created very few jobs, is overcounting the few jobs it actually creates, and now claims not to be all that interested in new jobs.

Its not unlike the Mass Technology Development Corporation, a state-backed venture fund , that has made some money (but declined to return its profits to the state). But it makes very few investments — 3 new investments in the last fiscal year — and usually invests with other VCs, which prompts me to ask — why are state funds needed for this purpose?

But they are spending their money on something — lavish parties and massive ‘retention’ bonuses for long-term employees.