The city of Philadelphia wants to bankroll local startups with a new city-backed seed fund.
Mayor Michael Nutter will make the announcement Friday morning.
The StartUp PHL Seed Fund will combine $3 million from the city with another $3 million from a venture capital firm. The pot of money will be managed by the private firm, which has yet to be selected.
The idea is to trust to the pros in investing in early stage companies that might put down roots in Philadelphia.
“This is about enhancing the entrepreneurial culture in the city,” said Deputy Mayor for Economic Development Alan Greenberger, “by making sure that many of the good ideas that are produced here can stay here, thrive here and then seek other private investment as they grow.”
Greenberger says the city will take a hands-off approach with the fund, with only a few restrictions as to how long portfolio companies must stay.
The idea is modeled on a similar inititiative by New York City.
Philadelphia will also make available another $500,000 for supporting the city’s existing startup sector.
Greenberger says both aspects of the StartUp PHL initiative are all about “seeding companies that can actually grow here” — not about the city getting a direct return on its investment.
“As businesses start here, jobs get created, and that is certainly one of the goals,” said Greenberger. “But the sort of ‘before that’ goal is creating a culture in which businesses are created with regularity.”