Capco Draws Firms, and Doubts, to D.C.

"It’s a straight transfer from the taxpayer to the Capco [venture firms]. It’s one of the biggest rip-offs out there, and there are some real doozies," said Julia Sass Rubin , an assistant professor of public policy at Rutgers University who has studied Capco programs. "It’s a very convoluted and complicated piece of legislation. . . . It’s difficult to understand why anyone would do this, except that they don’t understand it."

Last month, Adam Goozh , chief executive of CreateHope Inc. , a firm that sells software to manage corporate giving programs, asked his 45 employees to pack up their desks and move their office from Bethesda to the District.

The relocation qualified CreateHope for $3.8 million in funding through the District’s little-known venture capital program.

CEO Adam Goozh moved CreateHope Inc. from Bethesda to the District to take advantage of a funding program designed for small businesses.

Unlike Maryland, which proudly promotes its venture fund as the most active investor in the region, and Virginia, which issues big news releases each time it makes an investment through its Center for Innovative Technology , the District has been largely quiet about its $50 million venture funding initiative.

By Ellen McCarthy

Full Story: http://www.washingtonpost.com/wp-dyn/content/article/2005/10/26/AR2005102602365.html?nav=rss_technology