| Type | Government |
|---|---|
| Industry | Private Equity |
| Founded | 2005 |
| Headquarters | Austin, Texas, United States |
| Products | Venture Capital |
| Total assets | $500 Million |
| Employees | ~ 8 |
| Website | www.emergingtechfund.com |
The Texas Emerging Technology Fund (often abbreviated as TETF or ETF) is a technology investment fund created by legislation in 2005 at the urging of Governor Rick Perry to provide Texas with an unparalleled advantage in the research, development, and commercialization of emerging technologies. The enabling legislation (Texas HB1188 of the 79th Legislature) launched the ETF with $200 million to help create jobs and develop the economy of Texas[1]. Legislative revisions during the 2007 and 2009 sessions have expanded the total funds under management to approximately $500 million.
As of October 2010, the program has given a total of $173 million to 120 companies as well as $161 million to educational institutions.[2]
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The ETF focuses on three main investment areas:
ETF's first investments were executed in May 2006. By October 1, 2009, the ETF was the single largest pre-seed investor for emerging technology companies in the entire United States. As of June 6, 2011, the ETF had invested $196M in 132 commercialization investments. Approximately 1/2 of ETF's commercialization investments have been made within the biotechnology and life sciences industry[3].
The ETF established seven Regional Centers of Innovation and Commercialization (RCICs) to foster technology commercialization throughout the entire state of Texas and act as an efficient deal sourcing mechanism. In addition, a statewide Life Science Regional Center of Innovation and Commercialization also was formed. The RCICs act as the regional agent to identify, evaluate, and submit promising proposals from their respective regions to the ETF Advisory Committee. The ETF Advisory Committee makes final decisions on awards. RCICs work closely with applicants in assisting with ETF proposal development, post-proposal debriefings, and commercialization activities. In addition, RCICs are a strong focal point to increasing cooperation and spurring collaboration between industrial, financial, and academic entities[4].
ETF estimates that portfolio companies and awardees have raised close to $1B in follow-on investment and private funding following ETF investment[5]. Cardiospectra, Inc., an ETF portfolio company, was acquired by Volcano Corporation in December 2007 for $25M in cash with an additional $38M available upon the achievement of specific milestones[6]. ETF's return on investment on the Cardiospectra deal was 216% as of January 2011[7].
The ETF is housed within the Economic Development division of the Texas State Government. Jonathan Taylor currently serves as ETF Director. Prior ETF Directors include Mark Ellison and Alan Kirchhoff. You can visit the ETF website at: http://www.emergingtechfund.com
An October 2010 article by the Dallas Morning News editorial board argued for fundamental reform in how the fund works. The board stated, "The way Texas doles out money... raises such serious questions about the role of political donations in the fund's operation that the governor and the Texas Legislature should revamp it." Although the board considered it "a valuable program", it remarked that "other states have tried to keep politicians at arm's length from the selection and funding process... Texas needs to do the same".[2]
Columnist Timothy P. Carney has argued in the Washington Examiner that the fund is "corporate welfare"/"corporatism". He labeled the $4.5 million grant to Convergen LifeSciences as "unsavory" since the company's CEO David Nance has donated $80,000 to Perry.[8]
In response to criticisms, Governor Perry has said that it "is a pretty rare occurrence" for him to know that political supporters have connections to firms that receive funding.[2]