Ohio Taxpayers on the Hook as Venture Fund Can't Pay Bondholders
- Waiting for startups to produce cash, it couldn’t meet debts
- Venture-capital fund’s returns have lagged benchmark
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The venture-capital fund created by Ohio to cultivate local startups is going on public assistance.
Still waiting for its young companies to morph into the next Snap Inc. or Facebook Inc., the Ohio Capital Fund, which was financed through the sale of municipal bonds, didn’t generate enough money from its investments to pay $9.8 million on February 15, when the first principal payments on its debt started coming due, according to a securities filing. To avoid a default, it had to draw on $7.5 million from the state, the only time the fund has turned to that taxpayer lifeline in its 11-year history.