State’s New $13M Venture Capital Program Moving Forward

Karl is the president of the Hawaii Strategic Development Corporation, an agency of the state of Hawaii that partners with private sector investors to mobilize investment capital for the growth sectors of Hawaii’s economy. Photo courtesy of HSDC.

By Sonia Isotov

On July 26, the Hawaii Strategic Development Corporation (HSDC) will hold an information meeting on Oahu, to inform the public about its new venture capital fund and to seek input on implementation.

In May, the Governor announced the allocation of $13 million by the U.S. Department of Treasury’s State Small Business Credit Initiative (SSBC) to invest in Hawaii businesses through the HSDC’s venture capital Fund of Funds Investment program.

“The program provides a powerful incentive for new private lending to small businesses, which will help spur additional job creation and economic growth throughout Hawai’i,” said U.S. Treasurer Rosie Rios, in a written statement released earlier from the governor’s office.

Specifically, at this first meeting, HSDC would like to identify opportunities to invest in qualified venture capital funds or investment entities that will develop and mentor Hawaii-based technology companies and help them enter venture capital markets.

“Venture capitalists play a critical role in supporting the growth of small businesses and job creation in Hawai’i,” said Danton Wong, HSDC Board Chairman. “This opportunity will empower local entrepreneurs to grow their businesses and build a stronger economy for Hawai’i.”

Established in 1990, the Hawaii Strategic Development Corporation (HSDC) is an attached agency of Hawaii Department of Business, Economic Development, and Tourism (DBEDT) that seeks to promote technology-based economic development and economic diversification in Hawaii through a return driven investment program in partnership with private capital.

Generally, HSDC seeks to invest in venture capital partnerships that in turn will make direct investments into Hawaii-based companies. The general partners of the venture capital partnerships, or fund managers, are private sector investors who pool funds from a number of investors, identify and invest in promising businesses, and manage the investments until an exit from the investment is achieved.  In this manner, HSDC is able to leverage public funds with private capital and utilize the investment acumen of the private sector in selecting suitable investments.

Emphasis is given to investment opportunities that further technological innovation in Hawaii.  HSDC is currently precluded by law from investing in retail businesses, housing construction, and the tourism sector.

The meeting will be held on July 26, from 8:00 a.m. to 9:30 a.m. at the Hawaii State Art Museum (HiSAM) building, 250 S. Hotel Street, 1^st Floor, downtown Honolulu.

Written comments are also being taken and are due by August 22, 2011. More information on this program can be found at www.hsdc.hawaii.gov, call HSDC at (808) 587-3830 or email to Karl Fooks, President, HSDC, karl.fooks@dbedt.hawaii.gov.