By SIMON COLLINS
Science Minister Pete Hodgson wants the Government to consider investing "tens of millions of dollars" in a new venture capital fund.
He has told officials to find ways to raise money for the fund from existing state organisations, which may include crown research institutes.
The money will be used, in
a joint venture with private sector investors, to provide capital for new businesses, including spinoffs from existing firms, universities and research units.
Mr Hodgson wants the Government to invest for only a limited time, and then take its money out either at a set date or when the fund has returned an agreed profit.
His decision to promote it reverses previous Government caution on the issue.
Just two months ago, he said he wanted to "suck and see" the effects of new Industry NZ grants before deciding whether the state should again invest in businesses.
Apart from a $5 million contribution to the $25 million Greenstone Fund in 1993, the new fund will be the first Government move into venture capital since the Development Finance Corporation collapsed in 1989.
Mr Hodgson said that in an ideal world the Government should not be involved in venture capital.
"Should we become involved, and I believe we will, we will not be involved in the day-to-day management of it, because I don't think the public sector has the skills to make these quite difficult decisions," he said.
"So all we are doing is saying to the private sector that we are going to ease the formation of a venture capital fund by being one of the funders.
"I hope we would be a minority funder."
Venture capitalists are investors who take a big ownership stake in a business and work with its managers until the business is ready to raise longer-term capital.
