Entrepreneurship in new goods, services, and processes is an increasingly important driver of long-term prosperity in communities across North Carolina. Although the state has a reputation for entrepreneurship due to impressive ventures in places like the Triangle and Charlotte, North Carolina actually ranks nationally in the middle of the pack on various measures of innovation.1 North Carolina’s future depends on accelerating its entrepreneurial economy and providing opportunities for even more people and places to be brought squarely into the entrepreneurial ecosystem.
To that end, North Carolina should consider the following ideas:
Launch a Community Innovation Fund.
North Carolina should establish a competitive block grant program that would accelerate entrepreneurial activity in select communities. Similar to the NC Department of Commerce’s “Main Street Program,” the fund would award grants based on proposals that demonstrate measurable outcomes, clear timelines, public engagement, matching funds, and future scalability. Each community would receive technical support and receive additional funding upon the achievement of concrete, specified outcomes (e.g., job creation, financial leverage).
Establish a “NC Ventures” Revolving Loan Fund.
North Carolina should establish a quasi-public revolving loan fund to address the capital gap for certain types of start-up companies, especially those engaged in promising industrial sectors (e.g., biotechnology and advanced manufacturing) and based in certain communities. Similar to the “Mass Ventures” fund in use in Massachusetts, the North Carolina fund would blend professional management by experienced venture capitalists with public oversight. Loans would flow to firms in identified strategic investment areas and communities, with special attention paid to ventures that originated from a public college or university. Funds provided by NC Ventures initially would take the form of preferred debt, and monies repaid would be re-invested in other ventures.
Create a Statewide Venture Multiplier Fund.
A matching investment vehicle for venture funds based in North Carolina, the Venture Multiplier Fund would expand the pool of capital available for investment in emerging enterprises. Allowing the NC Department of the State Treasurer to invest 10 percent of the state’s unclaimed property fund into such a fund would, based on current values, generate some $40 million annually in additional venture funding.2 The funds could be directed toward strategic industries or targeted geographies, or they could be used to match existing local funds and to attract venture capital from other parts of the United States into North Carolina.
1 NC Board of Science and Technology. (2013). Tracking Innovation: North Carolina Innovation Index 2013. NC Department of Commerce.
2 North Carolina Treasurer Janet Cowell. (July 25, 2015). “Creating our own venture capital.” Raleigh News and Observer.