More than 400 entrepreneurs, educators and business leaders convened in Annapolis, Md., last week to show support for an initiative that aims to inject $100 million into the state’s Innovation Economy, which includes cybersecurity, biotechnology and environmentally friendly technology.
Touted by experts as a national model, InvestMaryland seeks to create a public-private partnership to boost investment in Maryland’s startups and early-stage companies, quadrupling the state government’s previous investment and spurring a culture of organic growth, the Maryland Department of Business and Economic Development said in a release.
The program could potentially mean thousands of new jobs in life sciences and biotechnology, cybersecurity/IT and green tech and attract billions of follow-on capital, all with no immediate cost to taxpayers, the department said.
As one of the program’s biggest supporter, Maryland Gov. Martin O’Malley testified before Maryland Senate and House committees, urging legislators to pass InvestMaryland, which “might just be the difference between helping grow the next MedImmune or Human Genome Sciences here in Maryland, or watching it happen in another state or country.”
A host of leaders from international business and education joined the governor at the witness table, including Johns Hopkins University President Ron Daniels, who testified that university researchers were awarded 44 patents, 35 invention disclosures and executed 104 license and option agreements in fiscal year 2010, with the majority in the biotechnology and medical device fields.
“Maryland is recognized as one of the nation’s leaders in science and technology research,” Daniels said. “At the same time, Maryland’s existing technology companies continually experience significant difficulties accessing venture capital and needed cash flow for their research enterprise. It would be extremely helpful to support fledgling companies in their early years in order to encourage the formation of startups in the state.”
There are two aspects of InvestMaryland that make it a particularly strong model for other states to emulate, said Dr. Julia Sass Rubin, a professor at the Edward J. Bloustein School of Planning and Public Policy at Rutgers University.
“First, the program requires private venture funds that receive investments through this program to return all of the state’s principal investment and 80 percent of the profits, as they would do for any private-sector investors,” she explained. “Second, the program uses an auction to monetize the tax credits, which increases competition and efficiency. Both of these provisions ensure that Maryland’s taxpayers are getting the most for their investment.”
InvestMaryland is unique in that it seeks the maximum benefit for taxpayers, while investing in Maryland’s Innovation Economy, said Maryland Department of Business and Economic Development Secretary Christian S. Johansson.
“Our goal is to invest in the most promising companies, so that we can create an evergreen fund that will ensure a continuous supply of capital for future investments,” he added.
Steve Dubin, CEO of Martek Biosciences Corp., said the program excited him “not only because we will be helping to fund many promising start-up companies, but because of the impact that the state can have by leading deals and encouraging other investors to co-invest with and within the state.”
“InvestMaryland will attract venture funding to Maryland as well as companies that will want to locate in a state where early-stage money is more readily available,” said Dubin, who also serves as co-chair of the Maryland Economic Development Commission.