technology fund type government industry private equity founded 2005 headquarters austin texas united states products venture capital total assets 500 million number of employees 8 website www.emergingtechfund.com the texas emerging technology fund often abbreviated as tetf or etf is a technology investment fund created by legislation in 2005 at the urging of governor rick perry to provide texas with an unparalleled advantage in the research development and commercialization of emerging technologies . the enabling legislation texas hb1188 of the 79th legislature launched the etf with 200 million to help create jobs and develop the economy of texas . 1 legislative revisions during the 2007 and 2009 sessions have expanded the total funds under management to approximately 500 million . as of october 2010 the program has given a total of 173 million to 120 companies as well as 161 million to educational institutions . 2 contents 1 fund administration 1.1 investment focus 1.2 deal sourcing 1.3 accolades 1.4 fund management 2 debates and commentary about funding 3 see also 4 references 5 external links fund administration edit investment focus edit the etf focuses on three main investment areas incentives for commercialization activities early stage technology investment funds designed to assist companies in transforming ideas concepts and prototypes into commercial viable products . research award matching funds create public private partnerships which leverage the unique strengths of universities federal government grant programs and industry . acquisition of research superiority funds for texas higher education institutions to recruit the best research talent in the world . etf s first investments were executed in may 2006 . by october 1 2009 the etf was the single largest pre seed investor for emerging technology companies in the entire united states . 3 as of june 6 2011 the etf had invested 196m in 132 commercialization investments . approximately 1 2 of etf s commercialization investments have been made within the biotechnology and life sciences industry . 4 2014 has witnessed a slowdown in all three versions of etf awards at the same time a special texas house subcommittee explores incentives programs ahead of the 84th texas regular legislative session . deal sourcing edit the etf established seven regional centers of innovation and commercialization rcics to foster technology commercialization throughout the entire state of texas and act as an efficient deal sourcing mechanism . in addition a statewide life science regional center of innovation and commercialization also was formed . the rcics act as the regional agent to identify evaluate and submit promising proposals from their respective regions to the etf advisory committee . the etf advisory committee makes recommendations to trustees who make final decisions on awards . rcics work closely with applicants in assisting with etf proposal development post proposal debriefings and commercialization activities . in addition rcics are a strong focal point to increasing cooperation and spurring collaboration between industrial financial and academic entities . 5 accolades edit the etf has been recognized nationally as the most active early stage technology venture funds in the country . 6 the fund estimates that portfolio companies and awardees have raised close to 1b in follow on investment and private funding following etf investment yet this is self reported information and has not been audited . 7 cardiospectra inc. an etf portfolio company was acquired by volcano corporation in december 2007 for 25m in cash with an additional 38m available upon the achievement of specific milestones . 8 etf s return on investment on the cardiospectra deal was 216 % as of january 2011 . 9 several etf companies have been acquired and there has been one initial public offering since the fund s inception . christopher banas of palmaz scientific cardiospectra and now pryor medical and paul castella texas technology fund austin filed the following lawsuit banas v. volcano corp.case no. 12 cv 01535 who ... . banas and castella initiated this action against volcano seeking millions of dollars . it would be patently unfair to hold that volcano waived its contractual right to attorneys fees because it appropriately required banas and castella to plead the basis for their standing to assert breach of contract .6 cf johnson v. myers 2014 wl 2214045 at 2 n.d.cal . may 28 2014 it would be inequitable to limit defendants attorney s fees recovery to the assets of a single plaintiff when every litigant was 47 f.supp .3 d 965 invested in the outcome of the action and aspired to win money . if banas and castella have an arrangement with other former cardiospectra shareholders or the dismissed defendants regarding indemnification for attorneys fees that is their business . however there is no question that as plaintiffs banas and castella are liable for attorneys fees in the first instance ... . banas and castella then appeal ... and file an affidavit of inability to pay . ... yet they say nothing about any efforts they have made in recourse to those institutions and dozens of other individual and institutional former shareholders to seek help in securing the required bond pursuant to their indemnity rights as shareholder representatives . mot . at 4 5 . the sincerity of plaintiffs invocation of the state and university of texas is specious on its face as neither institution was a party to any of the three complaints filed by plaintiffs . ezer decl . ex . a complaint ; ex . b first amended complaint ; ex . c second amended complaint ... . fund management edit the etf is housed within the economic development and tourism division of the texas state government . terry chase hazell currently serves as the tetf director and is considered the most private equity experienced director to serve . prior tetf directors include jonathan w. taylor mark ellison alan kirchhoff and interim director patrick boswell . you can visit the tetf website at http www.emergingtechfund.com etf has consistently maintained an extremely low analyst to project investment ratio . debates and commentary about funding edit this section needs expansion . you can help by adding to it . august 2011 the internal rate of return irr of the etf s very low and comparable to investing in u.s. treasuries . therefore questions have arisen about the etf s required rate of return and performance against benchmark . under the u.s. securities and exchange commission s rule 501 regulation d tetf does not fall under any of the eight definitions of accredited investor affecting tetf s participation in follow on offerings . an october 2010 article by the dallas morning news editorial board argued for fundamental reform in how the fund works . the board stated the way texas doles out money ... raises such serious questions about the role of political donations in the fund s operation that the governor and the texas legislature should revamp it . although the board considered it a valuable program it remarked that other states have tried to keep politicians at arm s length from the selection and funding process ... texas needs to do the same . 2 in response to criticisms governor perry has said that it is a pretty rare occurrence for him to know that political supporters have connections to firms that receive funding . 2 one such rare occurrence was convergen life sciences now called genprex . the ceo david nance was a donor and his company received a 4.5 million etf award . many involved in the etf process firmly believe the implications and criticisms of the press most notably the dallas morning news to be inaccurate and ignoring the hundreds of individuals around the state that freely devote their time energy and efforts to the process to ensure that texas is pushing the technological envelope that will lead to scientific breakthroughs and a stronger economy . 10 despite criticism by the press a majority of the etf s 140 investments since 2005 are still operating as of february 2013 . 11 many of the jobs created by the fund have been outside texas and several of the companies have left the state . by government accounting standards the fund has lost 25 million so far . but a separate valuation of the fund for legislators produced a significant gain in fund value . 12 texas government code 490.102 a 1 specifies a 50 % allocation of legislative appropriations for etf to incentives for commercialization activities awards though trustees have discretion to vary the allocation of legislatively appropriated funds to incentives for commercialization activities research award matching acquisition of research superiority awards each and every legislative biennium . some critics cite large awards to texas a & m university for research award matching afforded by this statute . texas government code 490.153 b. institutes a 2 % limit on funding for regional centers of innovation and commercialization . upon review of 2013 etf annual report to the texas legislature etf has exceeded allowed amount for awards to regional centers of innovation and commercialization in excess of 4.5 million dollars as of august 31 2013 . example calculation texas legislature appropriated 50m usd for etf during the fiscal year 2014 and 2015 biennium . therefore 500 000 is available to fund rcics for the fy 14 15 biennium 50m 50 % 2 % . however etf may have already exceeded this limit with awards for five or more rcics . these awards have been announced in newspaper reports and by the rcics but have not been formally announced by etf manager as recommended by state auditor . transparency concerns have dogged the fund since inception . nevertheless the state legislature has consistently funded the etf even as some legislators express concerns over the fund s true performance in the areas of job creation and return on texas taxpayers monies . the texas state auditor s report of 2011 was not complete in that job creation and valuation methodology remain opaque up to the present day . see also edit venture capital economy of texas texas enterprise fund references edit texas emerging technology fund website https web.archive.org web 20110623151551 http governor.state.tx.us ecodev etf . archived from the original on june 23 2011 . retrieved june 24 2011 . missing or empty title help a b c editorial it s time to fix the emerging technology fund . the dallas morning news . october 4 2010 . retrieved august 23 2011 . white paper on the texas emerging technology fund pdf https web.archive.org web 20131105233504 http www.horne llp.com media 169867 white % 20paper % 20tx % 20emerging % 20tec % 20fund 041211.pdf . archived from the original pdf on november 5 2013 . retrieved november 5 2013 . missing or empty title help etf dashboard http governor.state.tx.us files ecodev etf tetf dashboard.pdf 2011 06 06 dead link texas emerging technology fund website https web.archive.org web 20110604004640 http governor.state.tx.us ecodev etf etf rcics . archived from the original on june 4 2011 . retrieved june 24 2011 . missing or empty title help governor perry s 2009 state of the state https web.archive.org web 20130615153630 http governor.state.tx.us sots2009 ecodev . archived from the original on june 15 2013 . retrieved february 20 2013 . missing or empty title help white paper on the texas emerging technology fund horne cpas & business advisors 2011 04 volcano announces agreement to acquire cardiospectra . http ir.volcanocorp.com releasedetail.cfm releaseid 280496 2011 12 10 dead link annual report to the texas state legislature on the texas emerging technology fund 2011 01 01 texas coalition of capital http www.texascapital.org newsroom 10 15 10.html controversial texas startup fund proves its value http www.bizjournals.com dallas controversial texas startup fund.html ana lnk & page all weber paul j. 24 july 2014 . texas governor s startup fund is not all it seems . www.kansascity.com . associated press . archived from the original on july 26 2014 . retrieved 24 july 2014 . https www.eventbrite.com e seattle investment advisor seminar tickets 25497699305 external links edit texas emerging technology