The proposed NZ$300 million Venture Capital Funds Bill, aimed at attracting private sector investors into helping New Zealand startups expand beyond early startup phase, is a step closer to being legislated after it passed its first reading in New Zealand's Parliament on Monday.
"New startups are well served by angel investors with some seed capital support from the Government. But mid-sized ones, between about NZ$2 million and NZ$20 million in size, are not well supported," New Zealand Associate Finance Minister David Parker said.
"We want to increase the amount of technology that gets commercialised and to lift the level of innovation and productivity across the country. This Bill achieves those aims."
He added the fund will encourage more startups to stay in New Zealand for longer and support the proportion of these firms in local ownership.
Read also: Why VCs need to fund more companies with diverse leaders (TechRepublic)
If the Bill is passed, the New Zealand government said the venture capital would be administered by the Guardians of New Zealand Superannuation, who would appoint the New Zealand Venture Investment Fund to manage the fund-of-funds. The assets of the fund would also be returned to the Crown after 15 years and would be used to fund fund superannuation.
The Bill is one of the key elements that form part of the New Zealand's Wellbeing Budget. In one of the six key areas outlined in the Budget, the New Zealand government wants to build a productive nation by "supporting a thriving nation in the digital age" through innovation, social, and economic opportunities.
Following the passing of the first reading, the Bill is now be open for submissions during the Select Committee process and government agencies will be consulted directly with industry.
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