![]() Today, the drawback on his original vision is that the larger public pension funds have outgrown the startup economy. It's a concept that originated years ago from the now-retired founder of one of the nation’s most prominent pension consulting firms. Emergent businesses based in a state where a pension fund participates would have a fair shot at some of that capital if they could pass stringent due diligence reviews and fiduciary governance oversight by angel investment experts in their industries. As a bonus, they could collectively fuel the engines of economic growth nationwide. Pension trustees could harvest lush investment returns on a nationally diversified portfolio with lower fees than the venture capital industry typically exploits. That’s where the idea of an “innovation fund” partnering with a dozen or so midsize local government pension funds could fill the void in this still-risky growth stage. The startups’ cash cliff has been cited as the cause of a “ mass extinction event” - a dead cylinder in the U.S. The sequel to that story is that the failure of that bank and several others left a gaping void in the nation’s entrepreneurial economy - the place where new jobs spring out of the innovators’ alchemy of novel technologies, management skill and risk capital.Īs a result, many early-stage growth companies in America are now stranded in a financing no man’s land between the highest-risk seed capital stage funded by individual angel investors and the multibillion-dollar private equity sector that still looks for eight- and nine-figure deals featuring companies already making sales on their way to a stock exchange listing. ![]() Most of the media coverage of the collapse of Silicon Valley Bank was focused on the long lines of depositors who feared losing their money and the eventual bailout by the FDIC. ![]()
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