Maryland succeeded in raising $84 million to invest in promising technology companies across the state via a novel online auction of tax credits, officials announced Thursday.

The InvestMaryland plan, a cornerstone of Gov. Martin O'Malley's legislative platform last year, completed a key milestone with the online auction, in which 24 insurance companies bid up the price of tax credits they wanted to receive in the future. In the end, 11 companies won the credits and the state surpassed the minimum of $70 million that it expected to receive.

The cash will be used by the Maryland Venture Fund Authority, created by the General Assembly last year, and the Maryland Department of Business and Economic Development to invest in startup companies, ranging from biotech and cybersecurity to software and health care.

"I think it's really amazing," said Julia Sass Rubin, a developmental finance professor at Rutgers University who closely follows states' economic development efforts and was paid $2,500 to review the Maryland plan last year.

The money comes as public officials and business leaders are promoting the importance of startups and small businesses in driving the nation's economy. Last year, President Barack Obama launched the Startup America initiative, pushing for tax credits and proposals favorable to new companies.

Maryland is seen as a state with top technical and scientific talent but lagging in technology transfer from universities and commercialization of research. The InvestMaryland program dovetails with a legislative proposal this year by O'Malley to speed technology commercialization out of research universities in the state.

"This is a big day for Maryland entrepreneurs," said Christian S. Johansson, secretary of the Maryland Department of Business and Economic Development. "The goal here, hopefully, is to have Maryland be home to the next Google, the next Under Armour."

Insurance companies that do business in Maryland bought the tax credits to offset future tax liabilities, from 2015 to 2019. The state plans to invest that money over the next 18 months.

As a result, the program could start generating a return for the state before 2015, Rubin said.

Rubin suggested that Maryland should have opened the auction to other companies not in insurance.

The 11 insurance companies that won tax credits include Agency Insurance, Chubb, GEICO, Hartford Insurance, Injured Workers Insurance Fund, Medical Mutual, MetLife, New York Life, Selective and Traveler's, state officials said.

For the past decade, several states have used similar tax credit sales to invest in companies to jump-start economic development. But the practice has been criticized elsewhere because the states typically have not demanded a return on their investments, and often the money was later deemed wasted by public officials.

With the InvestMaryland program, two-thirds of the $84 million will be allotted to the Maryland Venture Fund Authority, an independent body that will place the funds with venture capital firms. Those firms will invest the money in Maryland technology companies without involvement from state government, state officials said.

State law requires that the authority seek to recoup its initial investment as companies grow and attract new investors. If the state's investments grow, 80 percent of such profits would go to the state's general fund and the balance would be retained by the venture capital firm.

The remaining third will be used by the Maryland Venture Fund, a separate, state-run venture capital entity that has a 17-year track record of making successful investments in state companies. Managed by the Department of Business and Economic Development, the fund has invested $25 million and returned $61 million, helping create 2,000 jobs and spur $1 billion in additional private investment, state officials said. Any return on those investments is reinvested in the fund.

"In the current market environment, entrepreneurs are going to be excited by new access to capital," said Peter Greenleaf, chairman of the Maryland Venture Fund Authority and president of MedImmune, a Gaithersburg biopharmaceutical company owned by AstraZeneca.

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