Treasurer Frerichs Announces Increase in Venture Funding to Help Grow Technology Businesses in Illinois

Treasurer Frerichs Announces Increase in Venture Funding to Help Grow Technology Businesses in Illinois

August 29, 2018

New Law Expands Illinois Growth and Innovation Fund to Provide Opportunities for Technology Businesses

SPRINGFIELD Illinois State Treasurer Michael Frerichs announced today that Illinois will now invest $700 million in startup technology companies, a more than $400 million increase in available venture capital funding, thanks to the new law.

“We are proud to work with the Illinois Venture Capital Association to increase the capital available to grow and expand Illinois technology firms, as well as to further expand the entrepreneurial ecosystem within Illinois” Frerichs said. “When these firms succeed, Illinois is in a better position to succeed.

Senate Bill 3205 was signed into law earlier this month. It amends the Technology Development Act to enable the State Treasurer to allocate up to 5 percent, of the State’s investment portfolio, on a recurring basis, to provide capital to technology businesses seeking to locate, expand and remain in Illinois. The additional investment capital will undoubtedly bolster the entrepreneurial community within Illinois and promote economic development across the State.

This funding was increased for the Illinois Growth and Innovation Fund (ILGIF), an impact investment fund which makes targeted investments in Illinois venture capital funds that invest in technology businesses based in Illinois or with a significant Illinois workforce. The goal is to support emerging technology businesses to create jobs and earn market-driven investment returns for the State.

The investment will attract over more than $2 billion in private investment dollars and create an estimated 60,000 new jobs.

Legally named the Technology Development Account I (TDA I), lawmakers in 2002 authorized the initial round of $74 million in investments. TDA I created approximately 6,300 jobs and generated more than $150 million in private investment. The investments went to companies such as SpotHero, Sittercity and Diagnostic Photonics.

Lawmakers in 2011 authorized a second round of TDA funding, called TDA II. However, the treasury did not act on the authorization. Frerichs, however, used the TDA II authority to create the $222 million ILGIF investment fund and began making investments in 2016. To date, ILGIF has created 2,000 Illinois jobs and has attracted over $800 million in private investment dollars. Investments include companies such as Tempus, Uptake, ShipBob, and Farmer’s Fridge.