Philadelphia has started a $3 million public-private venture fund to invest seed money in Philadelphia startups and is looking for an investment firm to run it. The aim is to stimulate and grow Philadelphia’s entrepreneur community and keep small businesses in the region.
Whether health IT or life sciences startups will secure any seed money from the initiative is an open question until an investment firm is selected, city officials said.
StartUp PHL is a partnership between the City of Philadelphia and the Philadelphia Industrial Development Corp. The private investment firm selected to manage the fund will be expected to match the city’s $3 million contribution. An RFP has been issued with a deadline of Dec. 7. The investment firm is expected to be announced in the first quarter of 2013.
Officials declined to talk specifics about the program, pointing out that they will have to wait until an investment firm is selected. There is already speculation that First Round Capital, a seed-stage venture capital firm with offices in San Francisco and New York that recently shifted its headquarters from the suburbs to Philadelphia, would be picked to manage the fund.
And since officials couldn’t really comment, it’s not clear whether health IT, mobile health or life sciences companies would be among the startups likely to get any of the $100,000 to $300,000 in seed funding that will be allocated to select companies. But the program has a second component: StartUp PHL Call for Ideas has a $500,000 fund to support innovative proposals and ideas “that support startups and entrepreneurs of all stripes in Philadelphia,” according to a statement from the mayor’s office.
In an interview with the Philadelphia Inquirer, Deputy Mayor for Economic Development Alan Greenberger said the new seed fund is modeled after the NYC Entrepreneurial Fund started by the Bloomberg administration in 2009.