Editorial: Ventura walks away from venture capital fund
The city of Ventura is nearing the close of a transaction that will get it out of the venture capital business. While we appreciated the city’s enthusiasm for creating technology jobs, we think the City Council has made the right move.
Back in 2007, Ventura officials dedicated $5 million in redevelopment money to a fund for job creation. Four-hundred thousand dollars went toward refurbishing the floors above City Hall into the Ventura Ventures Technology Center. That was a great idea — it leveraged the super-fast Internet connection at City Hall in a town where good broadband access remains stumbling block for startups. And the incubator nearly sustains itself through the modest rents it charges. [Read more in Stephen Nellis’ technology column.]
But the remaining $4.6 million went into investment funds, one the city controlled and one managed by venture firm DFJ Frontier. Investing in startups is risky. Even the professionals strike out more often than not, and we question whether it’s an appropriate endeavor with the public purse.
Investing necessarily involves picking winners or losers in business. We believe that’s best left to the private sector. We admire Ventura’s intentions, but it should stick to what cities do best — building infrastructure for the public’s benefit. Imagine the outcome if Ventura had instead invested $4.6 million in a fiber-optic trunk line on Eastman Avenue or another corridor with commercial space. If you build it, entrepreneurs will come.