The Colorado State House Democrats' first bill of the session, the Advanced Industries Accelerator Act, has been forced upon Coloradans through the media as offering economic aid to start-ups in select industries. Every pillar of reasoning supporting this astounding government encroachment is faulty. We would expect rent-seekers in the so-called “economic development” industry to cheer this legislation, but the idea that people beyond this narrow constituency are taking the bill seriously is troubling.
The first premise of this legislation is that there is a lack of venture capital in Colorado. That is completely false.
Next in the line of fundamental errors underpinning this bill is that fact that the government has no business competing with private VC investors for deals.
But wait, there’s more… Who will manage this fund or this process? Is there even a single person in the entire state government qualified to conduct the due diligence, financial statement analysis, financial modeling, valuation, and market analysis for these types of investments?