The fund could eventually pump $100 million into innovative new companies, The Atlanta Journal-Constitution reported.
Gov. Nathan Deal's recent decision to sign House Bill 318 forges a new, riskier, path for state funding of private companies.
There's no initial funding in the budget for the program, but it creates a blueprint for state investment that supporters hope could keep Georgia entrepreneurs from leaving the state.
"Businesses follow capital, and many companies that were started and incubated in Georgia have had to leave for the Northeast or Silicon Valley," said Lt. Gov. Casey Cagle, the plan's biggest supporter. "This is a way for us to create the ecosystem for companies that could be the next Apple or Microsoft."
Cagle and his allies must push lawmakers to include funding for the program in future years. But opponents say the government should not support private businesses with such a fund.
"This amounts to a slush fund and we don't support this type of crony capitalism," said Debbie Dooley, state coordinator of the Georgia Tea Party Patriots. "The government shouldn't be in the business of picking winners and losers, and the government shouldn't be in the business of supporting private business."
The measure was part of broader legislation that also allows developers of tourism projects to receive hefty sales tax breaks if they cost at least $1 million, attract at least 25 percent of out-of-state visitors by their third year and don't compete directly with existing Georgia businesses. State economic officials must also sign off on each of those projects.
The venture-capital fund, called Invest Georgia, would phase in funding over five years and be managed by a five-member panel appointed by the governor, lieutenant governor and House speaker. That panel would select an administrator to manage it, and the companies chosen for investment would also have to pump in their own private money.
Information from: The Atlanta Journal-Constitution, http://www.ajc.com
Copyright 2013 The Associated Press.