Wednesday May 7, 2003
Mayor Jerry Abramson today unveiled a comprehensive strategy designed to attract more venture capital to Louisville and create an environment for more home-grown businesses to flourish.
“Small-and-medium-sized businesses with fewer than 500 workers can be credited with much of the net job growth in our community over the past 10 years,” Abramson said today in a speech to the Venture Club. “How can we nurture a full range of home-grown businesses in our local landscape, from seedling startups that need venture capital to those ready to expand and bear fruit?”
To that end, Abramson today unveiled his strategy comprised of “7 Cs” for nurturing local business and growing venture capital opportunities. The strategy is the result of a series of small-group meetings over the last few months with 50 local bankers, investors and business owners.
The cornerstone is creating more venture capital. Abramson is proposing that the state’s largest pension and retirement funds dedicate two to three percent of their funding toward regional venture capital efforts. The largest public pension funds in Kentucky – for teachers and state employees – control about $25 billion. Abramson’s proposal could mean as much as $750 million to venture and alternative investments. Because of the size of the funds involved – and the comparatively good return of venture capital investments – the risk of such a strategy is minimal and the potential return tremendous, Abramson said. A similar approach already is used in 20 states, Abramson said.
In addition, local private foundations, pensions and endowments – with more than $5 billion in invested assets – also should be encouraged to invest locally in venture capital efforts.
The mayor also announced that the Midwest Venture Capital Conference would meet in Louisville in October – an opportunity to showcase the city’s strengths.
The other Cs include:
· Creating a capital pool for business expansion to help existing companies create new jobs. Abramson said he hopes to develop a model for a Metro Development Fund that could pool bank capital for business expansion loans.
· Coordinating community resources. Abramson said one challenge faced by startup companies, in particular, is that they get so focused on their own businesses and operational issues that they find out too late about potential tax breaks, technical help, special loan programs and grants.
· Creating an entrepreneurial super-center and resource council. A roundtable of institutions and agencies would meet regularly to better coordinate activities.
· Connecting local companies with the greatest job-growth potential. Abramson said a “Mayor’s List” of fast-growing companies should be created to garner recognition for companies and make sure they connect with resources.
· Company attraction – targeted recruitment of businesses out-of-town. Abramson said there are a host of young businesses in large cities like Atlanta or growing companies in small towns that could be a good fit for Louisville, if they knew what the community had to offer.
· Cooperative relationship building. Abramson said this effort could include providing business mentors to young CEOs, offering the services of University of Louisville MBA students as a resource for local businesses and encouraging the use of local talent and vendors.
· Community building. Abramson said that, among other efforts, the most prominent need is continuing his efforts to make education the community’s top priority, while embracing ideas to protect and enhance “the mix of elements that make the quality of life in our hometown terrific.”