Even in the venture capital-rich state of California during a boom period for clean energy investment, some clean energy entrepreneurs still have a hard time finding the capital resources they desire. As a result, one non-profit venture capital group, with a unique history of its own, is launching a new effort to support early-stage businesses. The California Clean Energy Fund (CalCEF) is currently helping to raise a $20 million angel fund to bridge a perceived gap in seed and start-up stage capital availability.

The Angel Capital Association's (ACA) latest report on angel group confidence finds little consensus about the state of the industry. While 40 percent believe that their total number of investments and their total investment dollars will decrease in 2009, 30.7 percent believe that their portfolio will increase, 23.1 percent believe it will stay the same.

Gov. Jim Doyle signed the 2009-11 biennial budget last month, providing funding for university-based research and enhancing tax credits for angel and venture investors supporting high-tech R&D.

As many states near the mid-point of their 2012 legislative sessions, we thought it would be a good time to take a look at some of the bills advancing in statehouses that could impact states' efforts to improve economic conditions. Several states are seeking to advance access to capital initiatives as they continue to struggle with declining revenue and tight credit restrictions. The following overview provides a sampling of TBED bills supporting access to capital, R&D enhancements and higher education standards.

Providing Access to Capital

Angel investment activity continues to recover from the crash that hit startup capital markets in late 2008, according to the latest report from the University of New Hampshire's Center for Venture Research (UNH CVR). During the first half of 2012, the number of ventures receiving angel funding grew by a modest 3.7 percent over the same period in 2011. Healthcare remains the dominant target of angel investments, comprising about a quarter of angel dollars into the first half of the year.

Angel investment increased by 12.1 percent in 2011, according to the latest release from the University of New Hampshire's Center for Venture Research. Much of this investment came from new investors and investors who had not been active in 2010. Last year, the number of active angel investors grew 20 percent, leading to increases in investment dollars, deals and average deal size. Seed and startup stage businesses were the target of 42 percent of angel deals, up from 31 percent in 2010.

Building on several of the new programs enacted during the regular legislative session (see the June 15, 2011 issue of the Digest), Gov. Dan Malloy last week signed into law HB 6801, a comprehensive legislative package that authorizes $626 million in bonds to support efforts aimed at job creation. The bill has several components to support high-tech entrepreneurship, workforce development, and incentivize manufacturers and small businesses.

Lawmakers and technology industry leaders in Georgia and Kentucky are hoping to establish capital programs during the 2012 legislative sessions in an effort to support new business creation and remain competitive with states already offering lucrative incentives.

Angel investors are reducing the average size of their investments, according to the latest report from the University of New Hampshire Center for Venture Research. In the first half of this year, total angel investment dollars fell by 27 percent from the same period in 2008, but the number of angel deals increased by six percent. As a result, the average deal size has fallen by 31 percent since early 2008.

Lawmakers last week passed the 2011-13 biennial budget, providing $12 million for the state's Centers of Research Excellence program. Although it is less than Gov. Jack Dalrymple's request of $20 million to expand the program and provide additional funding for three new centers, the legislature's appropriation will allow for continued investments in infrastructure and research capacity at a time when many states are reducing funding for TBED to help fill budget deficits.

At the close of the 2011 legislative session in Louisiana last week, lawmakers approved three measures to encourage investment in high-tech economic endeavors. This includes renewing and enhancing the R&D tax credit and the Technology Commercialization credit and reinstating an angel investor tax credit for investment in emerging startups.

The Michigan Economic Development Corporation (MEDC) recently announced the recipients of $25 million in awards from Michigan's 21st Century Jobs Fund. Each of the eight organizations receiving the awards will use the funding to support Michigan entrepreneurs and technology commercialization. The largest single allotment, $10.8 million, will benefit Ann Arbor SPARK, which plans to replenish its Michigan Pre-Seed Capital Fund with the award. Other recipient organizations will be offering capital and business assistance around the state.