Increasing Local Access to Equity Capital

The public role in increasing access to capital is, perhaps, the most controversial element of TBED – if any of the public's role in the 21st century to strengthen competitiveness in a global knowledge economy is controversial.



As researchers such as Paul Gompers and Josh Lerner have shown us, the availability of equity capital runs in cycles. In fact, presently, at the macro level and in some specific markets, there is an excess of private capital available. That 'fact' does not hold, however, in most regions of the country and even in many regions or industrial sectors of those states enjoying a surplus of capital.



Maximizing the impact of public involvement in either the 'have' or 'have not' regions of the country, then, becomes of upmost importance to ensure the free market system is not negatively affected by poorly executed public policy.



The research and interviews for developing A Resource Guide for Technology-based Economic Development revealed capital-related TBED efforts can be divided into two distinct camps:

• those programs and policies that encourage success for private investment; and,
• those efforts that provide direct or indirect funding to tech firms.

The guide discusses the varied approaches offered within both camps, provides real-world examples of each and, most importantly, provides candid comments on the positives and negatives of strategies to increase access to equity capital.



A Resource Guide for Technology-based Economic Development is available for download or purchase from SSTI. More information is provided in the article below.