When the Erie County Industrial Development Agency reinstated its venture capital activities in recent years and allocated $1 million toward that end, it sparked hopes that the ECIDA would be another source of capital for scalable technology startups.
But ECIDA regulations and its general mission of supporting industrial projects have proven that the money is not a sound fit for many of the local tech startups seeking venture dollars.
Instead, venture deals are more likely to resemble investments in West Seneca-based Gemcor, in which the ECIDA invested in 2004 and reaped large dividends for years before agreeing to sell its stake recently, as long as the jobs were kept local.
ECIDA president and CEO Steve Weathers has met with many of the 43North winners, along with other technology companies. And the ECIDA even did significant due diligence in OnCore Golf, which pulled in venture investment last year from such actors as Z80 Labs, Rand Capital Corp., John Koelmel and others.
Ultimately, though, those venture rounds did not meet with the ECIDA's necessity to pair investment in real things such as equipment to local job growth, Weathers said. That mission is specifically laid out in state IDA laws which are being carefully watched by regulators, he said.
Steven Weathers (Erie County Industrial Development Agency)
"We are looking for companies that we can define as a project," Weathers said. "In other words, they would possibly qualify for tax incentives offered by the ECIDA."