PRINTER'S NO. 3749
No. 2693 Session of 1988
INTRODUCED BY DORR, WASS, SCHULER, HERMAN, WOGAN, G. SNYDER,
CLYMER, GEIST, LINTON, JOHNSON, FOX, E. Z. TAYLOR, PERZEL,
RAYMOND, BOOK, GODSHALL, FARMER, D. W. SNYDER, GLADECK, BUSH,
S. H. SMITH, STUBAN, LANGTRY, KUKOVICH, ANGSTADT, MICOZZIE,
BOWSER, VAN HORNE, CORNELL, PRESTON, McVERRY, BURD, VROON,
NOYE, FLICK AND HECKLER, SEPTEMBER 28, 1988
REFERRED TO COMMITTEE ON APPROPRIATIONS, SEPTEMBER 28, 1988
AN ACT
1 Directing the Department of Commerce to establish a venture
2 capital network to act as a clearinghouse for information on
3 informal risk capital investment in Pennsylvania; and making
4 an appropriation.
5 The General Assembly of the Commonwealth of Pennsylvania
6 hereby enacts as follows:
7 Section 1. Short title.
8 This act shall be known and may be cited as the Venture
9 Capital Network Act.
10 Section 2. Findings and declaration of policy.
11 The General Assembly finds and declares as follows:
12 (1) It is necessary for small businesses in this
13 Commonwealth to have alternative methods of financing.
14 Venture capital investment affords that opportunity to
15 businesses.
16 (2) There is a need for an entity to be established
17 within the Commonwealth which will compile and profile
1 information regarding opportunities for risk capital
2 investment in new or emerging business ventures.
3 Section 3. Definitions.
4 The following words and phrases when used in this act shall
5 have the meanings given to them in this section unless the
6 context clearly indicates otherwise:
7 "Department." The Department of Commerce of the
8 Commonwealth.
9 "Venture capital." An investment that results in the
10 acquisition of equity interests or a combination of debt and
11 equity interest in a business which is expected to grow
12 substantially in the future and in which the expected return on
13 investment is to come predominantly from an increase in value of
14 the equity interest; that is not held through or secured by
15 stock that is an authorized investment under the authority of 71
16 Pa.C.S. § 5931(h) (relating to management of fund and accounts);
17 and that is not an interest in or secured by real estate.
18 Section 4. Powers.
19 The department shall have the following powers and duties:
20 (1) Establish, from funds appropriated to or otherwise
21 available to the department, the Venture Capital Network as a
22 clearinghouse for information on informal risk capital
23 investment opportunities in the $50,000 to $500,000 range in
24 Pennsylvania.
25 (2) Enter into service contracts, on a competitive bid
26 basis, with public and private agencies, institutions,
27 organizations and individuals for the purpose of establishing
28 and operating the Venture Capital Network.
29 (3) Receive and approve contract proposals for the
30 purpose of establishing the Venture Capital Network.
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1 (4) Solicit the support and contributions of public and
2 private agencies, organizations, institutions and
3 individuals.
4 (5) Accept and administer contributions of public and
5 private agencies, organizations, institutions and
6 individuals.
7 (6) Accept and administer contributions for the purpose
8 of operating the Venture Capital Network.
9 (7) Advertise and promote the Venture Capital Network.
10 (8) Solicit, compile, profile and maintain current
11 information describing opportunities for risk capital
12 investment in new or emerging business ventures.
13 (9) Identify active informal investors and profile their
14 distinguishing investment objectives.
15 (10) Provide, for a reasonable fee, a timely,
16 confidential and objective referral system serving both
17 entrepreneurs and investors.
18 (11) Maintain statistics on the operation of the Venture
19 Capital Network, including the number of profiled
20 entrepreneurs and investors, of referrals and of referrals
21 resulting in investment.
22 Section 5. Prohibited acts.
23 The Venture Capital Network shall not serve any fiduciary,
24 advisory or evaluative function in making referrals.
25 Section 6. Transfer.
26 The Department of Commerce, upon establishing the Venture
27 Capital Network, shall recommend to the General Assembly any
28 private sector sponsor or group of sponsors to assume the
29 administration of the Venture Capital Network.
30 Section 7. Appropriation.
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1 The sum of $25,000, or as much thereof as may be necessary,
2 is hereby appropriated to the Department of Commerce for the
3 fiscal year July 1, 1987, to June 30, 1988, to carry out the
4 provisions of this act.
5 Section 8. Severability.
6 If any section of this act or any part of any section shall
7 be declared invalid or unconstitutional, such declaration shall
8 not affect the validity or constitutionality of the remaining
9 portions thereof.
10 Section 9. Effective date.
11 This act shall take effect in 60 days.
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