Gov. Phil Murphy appeared Wednesday at the Commercialization Center for Innovative Technology, a state-run incubator in North Brunswick, where he showcased his plans for a New Jersey Innovation Evergreen Fund. — Photo by Edwin Torres/Governor’s Office
By Joshua Burd
Gov. Phil Murphy hit the road on Wednesday to highlight a plan to draw more venture capital to New Jersey, a key piece of his proposal to replace the state’s expiring business incentives.
Visiting the Commercialization Center for Innovative Technology, a state-run incubator in North Brunswick, Murphy showcased details of proposed New Jersey Innovation Evergreen Fund. Under the plan, the state would auction tax credits to New Jersey corporations over five years in order to raise $250 million to invest into startups, while seeking to pair those funds with at least $250 million from private venture capital sources.
The combined $500 million infusion would target New Jersey-based startups that show the promise and potential to scale up and create jobs, according to a news release.
“From Edison to Einstein, New Jersey has a long legacy of innovation. Today our researchers, inventors and entrepreneurs continue that tradition, and it is up to us to make sure they have the resources they need to build the businesses of the future,” Murphy said in a prepared statement after the event. “The New Jersey Innovation Evergreen Fund is a bold new idea that will connect New Jersey startups with the funding they need to grow and foster a vibrant innovation ecosystem while generating new revenues for the state. It is a true win-win for businesses and New Jersey taxpayers.”
The pitch is part of a package of economic incentives that Murphy unveiled last fall. The package also includes replacing and refining incentives such as the Grow New Jersey program, which is popular with the state’s commercial real estate sector but set to expire on June 30, along with tax credits centered on redevelopment, brownfields and rehabilitating historic buildings.
Developers and brokers have long pointed to technology and other innovation industries as a way to drive growth in the state’s office market, which has suffered from densification among tenants and slower job growth than the rest of the nation.
Under Murphy’s venture capital program, companies that purchase tax credits through the auction will also be required to make additional commitments, he said, such as providing mentoring and networking support for startups that receive investments through the NJIEF. To ensure optimal return on investment, the NJIEF will let private venture capital investors take the lead on identifying and investing in businesses in high-wage, high-growth sectors such as life sciences, financial technology, advanced manufacturing and cybersecurity.
The fund, which Murphy said would be self-sustaining, would see to invest in a diversified range of companies. As the fund’s investments mature and experience exit events such as acquisitions or initial public offerings, the investment proceeds will flow back to the NJIEF and its venture capital partners.
“Recapturing New Jersey’s leadership position in the Innovation Economy requires a comprehensive approach that includes investing in vibrant communities, attracting and retaining talent, and ensuring that entrepreneurs have access to the capital they need to bring their visions to life here in the Garden State,” said Tim Sullivan, CEO of the state Economic Development Authority. “By bringing together large companies, startups, and private venture capital, Gov. Murphy’s Innovation Evergreen Fund would give New Jersey a unique and powerful tool in our toolkit to help create the most diverse innovation ecosystem in America.”