Sep. 7–Some good news — finally — for venture capital in Florida.

Anyone who follows the high-tech world knows that such financing is the rocket fuel that helps young companies get off the ground. But the sluggish economy has dampened venture investing, particularly in Florida.

Now, a recent development may help change that. The managers of the state’s pension money have decided to invest $300 million to $400 million in venture-capital funds.

The investment, presumably, will pay dividends as the companies in which the venture funds invest succeed.

Some state retirees may be alarmed to learn that a sum of that size will be tied to the risky area of venture financing. But the state has invested in venture capital before, and New York, Massachusetts and other states already make similar investments.

Moreover, Florida’s investment will be less than one-half of 1 percent of the more than $90 billion in the state’s pension fund. The venture funds will be part of the pension’s “alternative” investment class, which constitutes less than 5 percent of the retirement fund.

“We did a great deal of research” before making the move, said Coleman Stipanovich, the pension fund’s executive director.

The decision could help venture financing in Florida because some of the state’s investment could find its way home, enriching funds and companies that operate here.

But of equal importance is that the state money will send a signal to larger funds outside Florida that this state has come to the table. Richard Fox, president of the Central Florida Innovation Corp., thinks that venture funds have shied away from Florida, in part, because the state’s pension has not been such a big player. Nationally, pension funds are a key source of financing for venture capitalists.

“It’s not a rule or a law or a published position,” Fox said, “but it’s something that comes out in discussion.”

The venture situation here is worsening. Three years ago, Florida companies received about 3 percent of all the venture dollars handed out in the United States. Today, Florida’s share is under 1 percent.

Why is that? The state is still known as a tourist destination, and it lacks a strong high-tech track record. Venture capitalists also like to invest close to home, and there are only 20 venture companies in Florida — compared with 200 in Boston, alone. And while some funds were drawn here during the tech boom of the late 1990s, most retreated to their home turf when the tech bubble burst.

What remains to be seen is whether the pension fund will face any heat over its decision. Fund managers came under fire after big losses from Enron stock cost the pension millions. And a state audit last year criticized the pension for some of its riskier investments — though it found that the fund’s performance overall was very strong.

BOTTOM LINE

— Celebrity Chef Emeril Lagasse expected to tape some episodes of his Food Network show in Orlando next month, but that’s not going to happen. No word on why. . . .

— Look for some funky advertisements from the Metro Orlando Economic Development Commission in national pubs. The ads, developed by Fry Hammond Barr, show people’s heads sprouting computer cables and fiber-optic wire to bolster Orlando’s tech image.

Susan Strother Clarke can be reached at sclarke@orlandosentinel.com or 407-420-5414.

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(c) 2003. Distributed by Knight Ridder/Tribune Business News.