By Michael Frerichs, Treasurer, State of Illinois

 

As the state’s chief investment officer, it was a moment of great pride and excitement to announce the creation of the Illinois Growth and Innovation Fund earlier this year. The $220 million fund is designed to invest with investment firms that, in turn, will provide capital to technology businesses that seek to locate or expand in Illinois.

Today, we are officially unveiling our new Illinois Growth and Innovation Fund website, to further share information and provide a way for entrepreneurs to pitch ideas to a wider audience searching for investment potential. In addition, later today, we are holding a town hall meeting for investment fund managers, tech incubator leaders, and entrepreneurs at the offices of the program administrator, 50 South Capital Advisors to learn more about how they can participate as well.

Illinois has a vibrant tech community, and this initiative to deploy more capital into the ecosystem is another step on our path to innovation and job creation. Investments will occur during the next three years. The investments will be spread across 15-20 funds and no more than 15 percent of the money will be placed within the same fund. An advisory board will provide guidance and transparency.

The Illinois Growth and Innovation Fund has two goals: support Illinois technology jobs and earn greater investment returns for state residents. We made the initial announcement earlier this year at 1871 amid a throng of tech industry leaders.  The Treasurer’s Office manages more than $25 billion on behalf of the state, local governments and families saving for college. The state’s approach to investing is cautious with an emphasis on the preservation of capital. A typical investment time horizon is overnight to ensure liquidity. The Illinois Growth and Innovation Fund’s longer time horizon means the expectation of greater overall investment returns.

The investments are made possible by 2002 legislation often referred to as Technology Development Accounts (TDA). The initial round of funding led to successful Illinois companies including SpotHero, Trunk Club, Sittercity and Diagnostic Photonics. Lawmakers in 2011 authorized a second round of TDA funding. However, previous administrations chose not to act on the authority.

 

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We believe that investment begets investment. The Illinois Growth and Innovation Fund is expected to attract more than $400 million in private-sector money, which will further spur interest in the Midwest tech scene in which Illinois is a leader. TDA I created an estimated 3,900 jobs (1,200 direct and 2,700 indirect). Based on that performance metric, TDA II and the Illinois Growth and Innovation Fund could create 3,600 direct jobs and thousands of indirect positions.

 

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Illinois Treasurer Mike Frerichs: Illinois Growth and Innovation Fund Creation

 

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Illinois Innovation Network Featured Resource: Each month, the Illinois Science and Technology Coalition features a service or resource available to innovators and entrepreneurs in the state of Illinois on the Illinois Innovation Network. To learn more and add your resource to the Network, click here.

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