NEWS
NEWS
NEWS
Texas Senate axes failure-plagued Emerging Technology Fund for startups
This week, the Texas Senate voted to cut former Governor Rick Perry’s Texas Emerging Technology Fund (TETF), a program that was intended to “make Texas the best place in the nation to pursue the next great idea” by helping startup companies get off the ground faster. The decision to end the program passed with a vote of 30–1, and it will now go to the House for a final vote.
The TETF has faced harsh criticism since its creation in 2005 due to lack of transparency and the failure of many of the companies it has supported. The fund has given out $205 million to over 145 early stage companies.
Some of the funded companies have been modestly successful. KDL Energy, for example, was awarded with $2.8 million from the TETF, and it went on to raise $50 million in funding and generated revenue. But many of the companies who received funding failed to create new jobs in Texas, and some ended up folding entirely. In 2013, the first year the TETF commission was required to report job numbers, it revealed that funded companies had created just over 1,200 jobs in Texas in 2012, a roughly 14 percent decrease from the year before.
There have also been allegations of corruption in the system, as some of the companies supported operated outside of Texas. About $16 million also went out to companies who had investors or staff who were donors to Governor Perry’s campaigns.
Current Texas Governor Greg Abbott’s new proposal plans on diverting the freed up funds toward enterprise and university programs. About $45 million would go to a newly created University Research Initiative, which would give universities more resources to recruit top academic researchers in scientific and engineering disciplines. The program may also contribute to matching research grants for Texas academic institutions. Another $45 million would go to the Texas Enterprise Fund, a job creation program that provides incentives for businesses to come to Texas or expand their presence there.
Image credit: “TexasStateCapitol-2010-01” by LoneStarMike – Own work. Licensed under CC BY 3.0 via Wikimedia Commons.
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