IDEAS home Printed from https://ideas.repec.org/a/sae/ecdequ/v15y2001i4p350-366.html
   My bibliography  Save this article

Certified Capital Companies (CAPCOs): Strengths and Shortcomings of the Latest Wave in State-Assisted Venture Capital Programs

Author

Listed:
  • David L. Barkley

    (Clemson University)

  • Deborah M. Markley

    (Policy Research Group)

  • Julia Sass Rubin

    (Harvard University)

Abstract

Certified Capital Companies (CAPCOs) are state-certified venture capital companies funded by insurance companies. As an incentive to invest in CAPCOs, insurance companies receive a $1 credit on premium taxes for each $1 invested (tax credits are spread over a 10-year period). The CAPCOs must invest in specific types of businesses according to an established time schedule to ensure the availability of tax credits to the insurance companies. Legislation authorizing CAPCO programs has passed in five states (Louisiana, Missouri, Florida, New York, and Wisconsin) and has been considered in eight other states (Iowa, Illinois, Arizona, Texas, Kansas, Vermont, Colorado, and North Carolina). This article summarizes the characteristics and experiences of CAPCO programs in the states that have passed enabling legislation. Lessons learned from the experiences of the state programs are provided, and the advantages and disadvantages of CAPCOs as compared to alternative state-sponsored venture capital programs are reviewed.

Suggested Citation

  • David L. Barkley & Deborah M. Markley & Julia Sass Rubin, 2001. "Certified Capital Companies (CAPCOs): Strengths and Shortcomings of the Latest Wave in State-Assisted Venture Capital Programs," Economic Development Quarterly, , vol. 15(4), pages 350-366, November.
    • Handle: RePEc:sae:ecdequ:v:15:y:2001:i:4:p:350-366
    DOI: 10.1177/089124240101500409
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/089124240101500409
    Download Restriction: no
    File URL: https://libkey.io/10.1177/089124240101500409?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Peter Eisinger, 1991. "The State of State Venture Capitalism," Economic Development Quarterly, , vol. 5(1), pages 64-76, February.
    2. Edgar Parker & Phillip Todd Parker, 1998. "Venture capital investment: Emerging force in the Southeast," Economic Review, Federal Reserve Bank of Atlanta, vol. 83(Q 4), pages 36-47.
    3. Florida, Richard & Kenney, Martin, 1988. "Venture capital and high technology entrepreneurship," Journal of Business Venturing, Elsevier, vol. 3(4), pages 301-319.
    4. Timmons, Jeffry A. & Bygrave, William D., 1986. "Venture capital's role in financing innovation for economic growth," Journal of Business Venturing, Elsevier, vol. 1(2), pages 161-176.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. David Hughes & Kris Mallory & Mihaela Szabo, 2004. "Factors Influencing Venture Capital Availability in Rural States: Possible Lessons Learned from West Virginia," Working Papers Working Paper 2005-04, Regional Research Institute, West Virginia University.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dean, Thomas J. & Meyer, G. Dale, 1996. "Industry environments and new venture formations in U.S. manufacturing: A conceptual and empirical analysis of demand determinants," Journal of Business Venturing, Elsevier, vol. 11(2), pages 107-132, March.
    2. Poonam Khanna & Lemaro Thompson & Michael Mcdonald, 2015. "Research On Venture Capital Firms’ ‘Investment Behavior A Review’," Working Papers 0197mgt, College of Business, University of Texas at San Antonio.
    3. Roberts, Edward Baer., 2003. "Initial capital for the new technological enterprise," Working papers 2103-1-89., Massachusetts Institute of Technology (MIT), Sloan School of Management.
    4. Barkley, David L. & DiFurio, Ferdinand & Leatherman, John C., 2004. "The Role of A Public Venture Capital Program in State Economic Development: The Case of Kansas Venture Capital, Inc," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 34(4), pages 1-24.
    5. Edward J. Malecki, 1993. "Entrepreneurship in Regional and Local Development," International Regional Science Review, , vol. 16(1-2), pages 119-153, April.
    6. Christopher S. Hayter, 2016. "A trajectory of early-stage spinoff success: the role of knowledge intermediaries within an entrepreneurial university ecosystem," Small Business Economics, Springer, vol. 47(3), pages 633-656, October.
    7. Doris Kwon & Olav Sorenson, 2023. "The Silicon Valley Syndrome," Entrepreneurship Theory and Practice, , vol. 47(2), pages 344-368, March.
    8. Laure-Anne Parpaleix, 2016. "Innovation and growth potential: managing investment in middle market companies," Post-Print hal-01496274, HAL.
    9. Kim, Younghwan & Kim, Wonjoon & Yang, Taeyong, 2012. "The effect of the triple helix system and habitat on regional entrepreneurship: Empirical evidence from the U.S," Research Policy, Elsevier, vol. 41(1), pages 154-166.
    10. Yating Li & Martin Kenney & Donald Patton & Abraham Song, 2023. "Entrepreneurial ecosystems and industry knowledge: does the winning region take all?," Small Business Economics, Springer, vol. 61(1), pages 153-172, June.
    11. Robert J. Stimson, 2014. "Proximity and endogenous regional development," Chapters, in: André Torre & Frédéric Wallet (ed.), Regional Development and Proximity Relations, chapter 1, pages 47-93, Edward Elgar Publishing.
    12. Florin, Juan, 2005. "Is venture capital worth it? Effects on firm performance and founder returns," Journal of Business Venturing, Elsevier, vol. 20(1), pages 113-135, January.
    13. Laure-Anne Parpaleix & Kevin Levillain & Blanche Segrestin, 2018. "Financing innovation: two models of private equity investment," Post-Print hal-01768986, HAL.
    14. Timothy Bates & William Bradford, 2009. "The impact of institutional sources of capital upon the minority-oriented venture capital industry," Small Business Economics, Springer, vol. 33(4), pages 485-496, December.
    15. Vance H. Fried & Robert D. Hisrich, 1988. "Venture Capital Research: Past, Present and Future," Entrepreneurship Theory and Practice, , vol. 13(1), pages 15-28, October.
    16. Gordon Murray, 1998. "A Policy Response to Regional Disparities in the Supply of Risk Capital to New Technology-based Firms in the European Union: The European Seed Capital Fund Scheme," Regional Studies, Taylor & Francis Journals, vol. 32(5), pages 405-419.
    17. Belitski, Maksim & Aginskaja, Anna & Marozau, Radzivon, 2019. "Commercializing university research in transition economies: Technology transfer offices or direct industrial funding?," Research Policy, Elsevier, vol. 48(3), pages 601-615.
    18. Massimo G. Colombo & Douglas Cumming & Ali Mohammadi & Cristina Rossi-Lamastra & Anu Wadhwa, 2016. "Open business models and venture capital finance," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 25(2), pages 353-370.
    19. Schudy, Simeon, 2006. "Jüngere Entwicklungen auf dem Risikokapitalmarkt für Biotechnologie in Deutschland," Kiel Working Papers 1270, Kiel Institute for the World Economy (IfW Kiel).
    20. Ron Boschma, 2022. "Evolutionary Economic Geography and Policy," Papers in Evolutionary Economic Geography (PEEG) 2220, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Oct 2022.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:ecdequ:v:15:y:2001:i:4:p:350-366. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.