You are here: Home / Startups / Rep. Jay Inslee announces bid for governor: Plans to funnel state money to startups

Rep. Jay Inslee announces bid for governor: Plans to funnel state money to startups

by 16 Comments

Inslee

Rep. Jay Inslee announced his run for Washington state governor today, touting the region’s strength as a center for innovation and proposing a plan to use funds from the state pension fund to help cultivate more startups. Inslee, a Democratic congressman who has served the 1st Congressional District north of Seattle since 1999, will likely face off against Washington state Attorney General Rob McKenna in 2012.

“The number one job of the next governor is job creation,” Inslee said, noting that he’s driven bulldozers in Bellevue, taught community college classes in Yakima and practiced law in Tacoma. “I know the full scope of the great work that Washingtonians do.”

Interestingly, Inslee chose Targeted Growth, an agricultural biotech company in Seattle’s South Lake Union neighborhood, to kick off his campaign.

Perhaps the most interesting aspect of the announcement — at least as it relates to the tech community — was Inslee’s proposal to use some of the state’s pension funds to support startup companies. Efforts to create government-led startup investment vehicles have been somewhat mixed in the past, including lack of focus at the state’s own Life Sciences Discovery Fund.

But that’s not stopping Inslee from pushing forward with a plan to boost the amount of capital going into the region’s businesses. In his remarks today at Targeted Growth, Inslee said that the state “has some work to do” in terms of making sure that businesses are well capitalized.

“When we are trying to build a business now in the state of Washington, it is a little easier for some of these businesses to get capital down in the Silicon Valley,” said Inslee. “We need to find a way to get startup capital for these new innovators. That’s why, when I am governor, I will propose to using a small, defined portion of our state pension funds to create a pool of capital available for startup innovative companies that pledge to start here, and pledge to stay here.”

During his remarks, the 60-year-old politician referenced the “power of imagination” that has helped to create new industries around aerospace, software and biotechnology.

“The secret we have in the state of Washington is innovation,” said Inslee, who called himself a child of the innovation agenda in the state. “We should continue to aspire to these new technologies, and make sure that we keep our eyes on the prize,” he said.

Inslee said that he will work hard to compete for new businesses, building industry “high-tech clusters” around “the industrial strength technology that we have.”

You can watch Inslee’s announcement for governor in this Ustream broadcast.

UPDATE: Rob McKenna tells Seattle P-I’s Joel Connelly that Inslee’s proposal to use pension money to back startup companies is a bad one, echoing what some GeekWire readers noted in this comment thread.

“Start-up capital is risk capital:  Any venture capitalist will tell you that you must be willing to risk it all.  Gambling on a start-up with pensioners money is not a wise policy,” McKenna. “I have looked at the idea, as has the state investment board, but this is simply not the proper use for these funds.”

Previously on GeekWire: Rob McKenna: Friend or foe of tech?

  • Hank Reardon

    Wonderful, the state will now take pension funds to gamble with on their politically connected friends.  This is a horrific idea with us taxpayers holding the bag.  Maybe if the actual recipients of the pension funds had to bear potential losses and not the taxpayer they would be up in arms.  If a start-up is a good idea, funds will be available through non-governmental sources.  This state is so dumb they will fall for this and elect this clown. 

  • http://www.wac6.typepad.com William Carleton

    Investing pension funds that have political strings attached to the investment . . . not sure how sound that thinking is. But Rep. Inslee has clearly thought long and hard about what government can do to counter the corporatizing of the Internet. I liked what he said on the KUOW Weekday program with Steve Scher last summer:

    “Codify common sense principles. Openness of the Internet. Any content, anywhere, anytime, regardless of the preferences of your Internet service provider. This is a liberty interest. This is also a business issue. If we reduce utility of the Internet, make it more like cable TV, that is bad for business development. . . . The [open] Internet has been the most powerful business development tool since the wheel.”

    Free statewide broadband under a Gov. Inslee? Could be a bigger spur to innovation than politicized investments.

    • http://blog.calbucci.com/ Marcelo Calbucci

      Don’t pension funds already invest large amount of money in VC Funds already? I think the difference would be to bypass the VCs on this case. Not?

      Either way, more money to fund startups is always a good thing in my book (as long as the criteria is not cronyism).

      • http://www.wac6.typepad.com William Carleton

        It’s the “pledge to start here, pledge to stay here” agenda (a political one) that’s different, and troublesome. Shouldn’t the business move wherever it needs to, if that’s in the best interest of the company and its shareholders?

  • Anonymous

    I don’t have a position on the governors race,  I certainly do on geographically target startup investing it is Dumb with a capital D.  Pension funds are for paying for pensions.  Targeting/manipulating their investment thesis or geography is likely to insure only that the pension ends up with less money then it might have if allowed to follow an unencumbered investment plan.

  • Harry

    I don’t think it’s the government’s place to fund startups.  Government needs to do things to make it more attractive for private parties to invest in startups.  This is a bad idea. 

  • Guest

    Rep. Inslee stands for local innovation. I, for one, stand with Rep. Inslee. Only by supporting our local businesspersons can Seattle retain its position atop the list of America’s startup hotspots.

    • RodneyTom

      Hey DipSh_t, government in washington does not support business, it only takes from business. If your DipSh_t Inslee had a brain, he would be campaining on the elimination of B&O taxes.

  • Watadn

    It would seem that many of you have forgotten what happened to the money that was taken from the social security program by our government. They promised to pay it back i am sure they thought they could pay it back. But as usual, we give them money and they spend it like fools and cannot pay back what they owe. We no longer have a social security program. Once again the government thinks it knows better than we do. It’s all BS.
    The government should stay out of businesses way and allow it to work it’s way out of this mess that we are in. The government caused this mess to begin with. Borrow from an existing retirement program, what a stupid idea.

  • fanofhoughton

    Jay Inslee is to Pretty and clearly going to “say” what he needs to get in. Ugh can we please get in someone smart to get this state back on track.

  • jvc

    Inslee is another Keynesian lemming willing to waste taxpayer dollars to have government pick winners. Crony capitalism which screws the real innovators and rewards those who are members of the “club” This bozo was running around Europe carrying Pelosi’s makeup kit at one of the big Euro-enviro-junkets pissing aways our tax dollars on expensive hotels and fat cat perks. As a small business owner, I hope the citizens of this state have learned from the pathetic Gregoire and will vote for Mckenna.

  • Mickeyl

    Jay involved community, at least in Kitsap, in his discussiions. I hope he makes the effort to get out and talk to we common folk before he starts making to many decisions.  Seems the first letter I got from him was the typical give me your money without any comments on where he stands on issues or when he intends to find out where his supporters stand on issues.Only way to really contact congress politicains is by drop down list and they send you a generic letter …Cantwell Murray Dicks all do that have not seen them in years here in Vancouver..Hope Jay is not like them or no vote.

  • William and Marilyn Feddeler

    JOIN US IS -NO!?

    No to what?
    No to fireworks gone mad.
    No to firebrands dumped from the sky on all that we hold dear.
    No to people who view it a freedom and right to dump on their neighbors.
    No to the attitude of freedom entitles one to dump without even offering to clean the mess.
    No to the dumb arguments by politicians who protect themselves saying ‘It
    is a freedom and a way for charities to earn most of their years needs.’
    No to politicians who speak against private fireworks privately by not in public.
    No to support of those politicians of both parties who have abandoned most of us.
    No to the volunteer work we have done for the citizens of this county amounting to 1000’s of hours.
    No to all county tax issues excluding educational issues…probably our only savior.
    No to being forced to stay home to protect your home.
    No to broken relations with nice neighbors whose personalities suddenly change to destruction.

    Yes to restoring the freedom to all of us majority or minority.…both are protected by the constitution.
    Yes to finding out what other city charities do to make money without fireworks.
    Yes to change to a total ban on these explosive at least a far as Oregon has done.
    Yes to allowing my wife and I to travel or visit friends or go to the Vancouver fireworks.
    Yes to the hope that reasonable people still exist.
    Yes to enjoy a place of wonderful beauty and friendly people…..except for some on the 4th.

    Bill and Marilyn Feddeler
    2311 NE 154th Circle
    Vancouver WA 98686
    360-573-2625
    Waterfed@netzero.net

  • http://pulse.yahoo.com/_PW34QGCMQ2EKJTKITVSD6QHEYA BryanM

    An absolutely brilliant idea. Mr.
    Inslee I laud you for your long-term perspective to keep Washington
    “Green”. Nay-Sayers to Inslee’s proposals are loyal to something
    other than Washington State.

    Consider the fact that a slice of the W.S.I.B pie is already allocated to
    private placements “and/or riskier investments. The argument that pension funds
    should not be invested in risky start-ups is just a straw man argument which
    bears no relevance to the investing strategies  presently practiced by the
    W.S.I.B.
     Notwithstanding, nothing (presently) in their bylaws or operating
    procedures precludes the W.S.I.B. from choosing to invest in a Silicone Valley
    start up instead of a Washington State start up.

    Theresa Whitmarsh Executive Director
    of W.S.I.B.  (and a  Palo Alto
    alum), prefers to retain the freedom to invest in a start up from San Jose if
    the risk/return ratio favors it over a Washington state start up. With blinders
    to the “…Collateral benefits of economic development…” she
    completely misses the fact that this is Washington State monies in her little
    pot and we Washingtonian’s may prefer to invest it locally.

    The “REAL” rate of return?

    Consider a hypothetical Spokane start-up in need of venture capital.

    Wouldn’t Washingtonian’s benefit
    more from the capitalization and success of this local start-up with an
    expected  rate of growth/return of say only 5% plus the added 500 Spokane
    jobs and the collateral economic benefit of millions in generated sales tax
    revenue and the long-term B&O revenues, than they would have from a
    W.S.I.B  investment in a California company with shareholder growth of 10%
    but which contributes nothing to the local economy and is free to outsource
    manufacturing to China a few years down the road?

    Dear Ms. Whitmarsh,

    Managing a multi-billion dollar public sector pension
    fund should require that the captain at the helm look to ALL of the beneficiaries,
    both direct contributors as well as the indirect taxpayers of the state of
    Washington.  It is we, the taxpayers who have
    ultimately guaranteed the solvency of the W.S.I.B consequently; we truly are
    stakeholders in the W.S.I.B. assets too. Remove your blinders and look towards
    keeping Washington Green with cash, jobs and future tax revenues, even if the
    IRR of your fund takes a couple percent hit from not choosing the next Google.

    I will wholeheartedly support Mr. Inslee’s proposal assuming he insists upon strict
    adherence to retaining corporate headquarters and manufacturing, in
    Washington State – in perpetuity (no more Boeing fiascoes). A corporate
    charter with a poison pill for any future acquisition or sale to facilitate
    thinly veiled attempts to “…rein in labor and manufacturing
    costs…”
    Here Here Mr. Inslee, You’ve garnered this Washingtonian’s vote.

    a few years down the road?

    Dear Ms. Whitmarsh,

    Managing a multi-billion dollar public sector pension
    fund should require that the captain at the helm look to ALL of the beneficiaries,
    both direct contributors as well as the indirect taxpayers of the state of
    Washington.  It is we, the taxpayers who have
    ultimately guaranteed the solvency of the W.S.I.B consequently; we truly are
    stakeholders in the W.S.I.B. assets too. Remove your blinders and look towards
    keeping Washington Green with cash, jobs and future tax revenues, even if the
    IRR of your fund takes a couple percent hit from not choosing the next Google.

    I will wholeheartedly support Mr. Inslee’s proposal assuming he insists upon strict
    adherence to retaining corporate headquarters and manufacturing, in
    Washington State – in perpetuity (no more Boeing fiascoes). A corporate
    charter with a poison pill for any future acquisition or sale to facilitate
    thinly veiled attempts to “…rein in labor and manufacturing
    costs…”
    Here Here Mr. Inslee, You’ve garnered this Washingtonian’s vote.

  • Elsie M.

    Umm, the state ALREADY does this. the pension fund is invested in all sorts of things, including venture capital. Except the way it is now that money is invested with venture capitalists in Silicon Valley, CALIFORNIA who choose the most promising startups to invest in. So is Jay Inslee crazy to suggest moving some of that money to venture funds in WASHINGTON and helping create a larger VC community here to help local startups get a fairer shake at the investments that are ALREADY funded by WA taxpayers? That doesn’t sound crazy to me.

  • Jim D

    The retirement system started being undermined in the 1970s–by both parties–when they “borrowed” for projects rather than actually fund them.  The legislature continued to “borrow” without fully funding and/or repaying leading to–imagine–underfunding!  Do I trust politicians when they say they are just “borrowing” from retirement funds?  Not on your life!