State to invest $2.3 million in clean-energy companies
BY MITCH DUDEK Staff Reporter June 25, 2014 12:08AM
Looking to give Illinois clean-energy startups a boost, Gov. Pat Quinn announced Wednesday the creation of a venture capital fund to be filled equally with state and private money and doled out to promising companies.
The Illinois Clean Energy Fund will receive $2.3 million from the state — money Illinois received from federal grants. And a matching investment will be made by the Clean Energy Trust, a group of private investors, such as billionaire Nick Pritzker, who have partnered with the state on the project.
CET is a nonprofit organization that provides guidance and money to startups. Any returns CET earns on its investments are reinvested in other clean-energy companies.
CET has a positive track record. Since its creation four years ago, it has hosted an annual business contest meant to identify, showcase and fund the best new clean-energy companies across the Midwest. It has doled out more than $1.2 million to about 60 contest finalists who have gone on to raise more than $42 million in additional investments, said CEO Amy Francetic, who noted that building an energy company is more difficult than building a Web-based company.
“This is a highly technical scientific undertaking . . . so it’s not as easy but it’s critically important,” she said.
Success will mean more jobs in Illinois.
“The goal is to try to create jobs and really leverage all the great science from our labs and universities,” Francetic said.
The Illinois Clean Energy Fund has already opened the application process for companies looking for a cash infusion.
Applicants will be vetted by the CET and an independent panel that the trust is putting together, said David Roeder, spokesman for the Illinois Department of Commerce and Economic Opportunity, which is helping to coordinate the fund.
“The money will go to companies that are more than just an idea in somebody’s head,” Roeder said. “They have to have clear services they are offering the market and need a little help to grow.”
The fund will help address a recent shortfall in energy startups in Illinois, which has been left to play catch-up with neighboring states.
Potential investments “could mean a lot to early stage companies, and more importantly could turn into an ownership stake in those companies that the state could sell at a profit,” Roeder said.
The setup is similar to the Illinois Innovation Accelerator Fund, which was created in 2007 with $10.4 million in state and private funds to invest in tech companies.
The fund made more than a dozen investments over five years with an average investment of $650,000, one of which was recently sold for “a premium return,” said Roeder, who could not provide an exact figure.
Decisions on which companies will receive money from the Illinois Clean Energy Fund will be made some time this fall, Roeder said.