Capital fund could get room to grow

A bill to enhance the Utah Fund of Funds is working its way through the legislative process.

SB11 was passed Wednesday by the House Business and Labor Committee after being substituted to include some clarifying language.

The bill primarily would increase the amount of total outstanding contingent tax credits in the program from $100 million to a cap of $300 million.

The fund's managing director, Jeremy Neilson, told the committee that increasing the tax credit amount "allows us to keep this program moving forward. It currently has the best-in-the-nation reputation, and we'd like to keep that moving here in Utah."

The fund is designed to provide access to alternative or nontraditional capital to Utah entrepreneurs. The program does not invest money into any company or individual. Instead, the program invests in venture-capital and private equity funds that commit to establishing a working relationship with the Utah Fund of Funds and Utah's startup and business community, and commit to making investments in qualifying companies.

At the Utah Technology Council's legislative leadership breakfast earlier Wednesday, Senate President John L. Valentine said the fund was designed to "put chum out in the water to attract investors to Utah."

"As we developed that, there was a lot of nervousness from a lot of us, including myself, about the chumming bill. But guess what? It worked," he said. The program has "developed Utah and put it on the map. Now it's time to take the next step."

Valentine said the fund has been beneficial in helping Utah retain burgeoning tech companies. "That is one of the reasons why we would like to take the next step. To go to the $300 million on the Fund of Funds allows us to do that next step instead of just being sort of angel or initial startup (funding)."

Neilson warned last fall that without the increased credit amount, the fund could face a "hibernation" period. At the time, nearly two dozen Utah companies had received investments from venture firms participating in the Fund of Funds program.

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