Coalition Supports Governor’s Economic Development Initiatives: Proposals will keep Texas the Nation’s Leader in Job Creation

Texas Governor Rick Perry’s economic development initiatives, such as the CAPCO program, are receiving support from the Texas Coalition for Capital:

The Texas Coalition for Capital expressed support for the economic development initiatives outlined by Governor Rick Perry in his State of the State address to the Texas Legislature and the people of Texas on Tuesday

“Governor Perry has been the strongest Chief Executive in the nation in terms of supporting economic development and job growth. The proposals he outline today will help keep Texas the best place in America to do business, and we certainly support that objective,” said Coalition president Craig Casselberry.

One program that has been particularly effective is the Texas Emerging Technology Fund, a state investment program that has been the most active investor in early stage companies in the country over the past two years.

Coalition Chairman Tom Kowalski added, “The investment infrastructure created by the ETF is very valuable and should be continued. Today, the ETF program provides a tremendous competitive edge for our state for growing and keeping our most promising young companies in Texas, and is part of a strong foundation for our long term economic growth. The Governor’s leadership in this area is most impressive.”

Texas is creating the most dynamic investment infrastructure in the country, part of a long-term strategy to keep our state the nation’s top job producer, the Coalition says. Public-private partnerships like the Certified Capital Company program support that infrastructure. The CAPCO program has proven effective at getting capital invested in small companies quickly and in a diversified manner – across industry sectors and geographically – creating high wage jobs for Texans.

The current economic climate makes the role of the public sector particularly acute. Private equity is proving hard to come by for small businesses as traditional lenders sharply curtail lending. Over two dozen banks that received the initial $250 billion in federal Trouble Asset Relief Program (TARP) funds cited paying debt due to bad loan portfolios as priority over making new loans. In addition, to preserve liquidity banks are not renewing lines of credit for many small businesses.

When small businesses cannot get loans from banks they often turn to risk capital providers, but venture investment too is down sharply. Venture firms raised 71% less in the 4th quarter of 2008 ($3.4 billion) than in the fourth quarter of 2007 ($11.7 billion). As a result, venture capitalists reserve more capital for their existing portfolio of investments rather than seek new investments. The lack of lending from banks and investing from venture firms will lead to a sharp decline in number of companies funded with private equity in 2009, likely leading to job losses for many, and bankruptcy for some small businesses.

About the Texas Coalition for Capital
The Texas Coalition for Capital is a non-profit, statewide coalition of leaders supporting economic development and job creation through long-term access to capital for Texas entrepreneurs and emerging companies. Working with industry stakeholders, investors, and public and private sector leaders, the Texas Coalition for Capital has become the premier resource in Texas for information on programs and policies supporting that core mission.


View Full Article