N.J. leaders celebrate ‘milestone moment’ for NJIEF

Murphy: Unique fund will ensure more companies start, grow and stay in N.J.

Here’s what you need to know about the approval Wednesday morning by the board of the New Jersey Economic Development Authority of the sale of $50 million of tax credits — revenue the EDA will use to jumpstart the New Jersey Innovation Evergreen Fund, its prized program.

The revenue raised not only will help initially fund the initial investments into six to 10 high-growth businesses in New Jersey in 2023 — done in a unique partnership with venture capital firms — it potentially will change the ability for New Jersey to bring dozens more to the state.

In its simplest description, the program is intended to build a sector of high-growth innovation firms, not just fund a few.

That’s the way Gov. Phil Murphy described it.

“This strategic investment will not only support New Jersey’s entrepreneurs, but will also ensure that more companies start, grow and stay in this great state,” he said. “Those highly successful companies that have built their reputations here now have an opportunity to support the next generation of great businesses that will carry New Jersey into the future. It also shows residents our commitment to making the state work for everyone with another innovative program aimed at expanding capital opportunities.”

This starts with the approval by the board for eight corporations, all with significant footprints in the Garden State, to purchase $50 million in tax credits through the NJIEF:

It continues with the board’s other announcement Wednesday: That it is accepting applications from investment firms to be considered Qualified Venture Firms, meaning they would be certified for participation in the program.

This designation is an important step that will enable them to access both additional capital to invest in qualifying high-growth New Jersey businesses and additional strategic resources available in partnership with the NJIEF tax credit purchasers.

The state hopes it will conclude with the NJIEF helping the state become an equity investor in startups, deploying up to $600 million into companies alongside professional venture capital groups in the next 5-7 years.

EDA CEO Tim Sullivan sees only great things ahead.

“Investors and entrepreneurs alike have hailed the novel NJIEF as a powerful tool that will catalyze investment into New Jersey startups, and now we know that the corporate sector sees the enormous value in the fund as well,” he said. “Under Gov. Murphy’s leadership, we are creating a powerful public-private partnership to drive economic growth and spur job creation. In 2022, we set the foundation for what promises to be exciting years ahead for the NJIEF and the innovation community as we begin to see investment dollars flowing into startups throughout the Garden State.”

As part of the auction, each applicant submitted plans to support the state’s innovation economy along with their financial bids, including a commitment to serve on the NJIEF advisory board for one year.

In total, the eight corporations approved made strategic commitments totaling nearly $3.8 million to bolster the innovation community. Examples of this strategic support included contributions to support external mentorship programs; free shared workspace open to high-growth startups; long-term commitments of education and training to support the futures of science, technology, engineering and math students from underserved school districts in the state; and forums that will bring world-class investors, enterprises and early-stage startups together in New Jersey.

State Sen. Andrew Zwicker (D-Hillsborough), who has long been a vocal advocate for the creation of the NJIEF, was thrilled with the developments.

“The approval today of the first group of auction winners that will support the N.J. Innovation Evergreen Fund is an important step forward for our state’s innovation economy,” he said. “New Jersey has long served as fertile ground for inventions that changed our world — from Thomas Edison and the creation of the lightbulb to Beatrice Hicks and the development of a switch that helped land the Apollo spaceship on the moon. The NJIEF will help us continue to create a vibrant culture of investment that is dedicated to growing the New Jersey companies of the future.”