The Associated Press reported on Monday that the Venture Michigan Fund, which has been investing in startups in Michigan since 2004, may be in trouble. The fund is admittedly working but with the state budget in such disarray it seems that Michigan House Appropriations Committee Chairman Al Pscholka (R) Stevensville, thinks cutting the fund off now will help stop the bleeding.
The fund was first introduced in 2004 and expected to run until 2054 with Michigan banks splitting the tab with the tax payers. Since it’s inception the fund has had two rounds of lending from banks totaling $450 million dollars. The fund has funded 41 companies with $150 million dollars of that money. The AP reports that according to the House Fiscal Agency the other $300 million was used for other expenses related to running the program. The banks have shelled out their portion of the money, however it’s coming up on time for the State to kick in theirs.
Two bills have been proposed to effectively cut the program off. The first bill would end the program immediately. The other would let it wind down through 2018. Either plan mans that the fund wouldn’t be able to take advantage of another $150 million dollars that has been pledged to the fund and funding companies out of the fund would stop.
“This fund was enacted with good intentions, but the reality of using Michiganders’ money to buy economic investments just isn’t sound policy or good government,” Pscholka said in a statement.