Proposal would expand state’s NCIC program to allow early‑stage venture investments from permanent school fund allocation

The Senate Government Affairs Committee heard Assembly Bill 427, which would revise the Nevada Capital Investment Corporation’s (NCIC) statutory authority so the corporation may make early‑stage and middle‑stage venture investments in Nevada businesses using funds previously authorized from the permanent school fund.

Assemblyman Steve Yeager, sponsor of AB 427, said the NCIC was created in 2011 (Senate Bill 75) and capitalized at $50 million; the legislature increased the amount authorized in 2021 to $75 million under Senate Bill 68. Yeager said the NCIC’s historical focus on later‑stage equity investments leaves a gap for early‑stage companies seeking seed and Series A capital, and the bill would allow the NCIC to invest both directly and through qualified venture managers, align investment priorities with the state economic development plan produced by GOED, and prioritize companies that hire Nevada workers, pay high wages, provide benefits and advance sustainability goals.

Jeff Saling (via Zoom), a startup investor and fund manager who testified in support, explained typical venture capital investment sizes and stages to the committee: smaller pre‑seed checks often range from tens of thousands up through mid‑six figures, seed rounds commonly range from $250,000 to a few million, and Series A rounds are larger still. Saling and Yeager emphasized that venture portfolios must be diversified because returns usually follow a ‘‘power law’’ in which a small number of winners generate a large share of returns.

Senators pressed on several points: Senator Ellison asked about typical investment sizes; Saling outlined a spectrum from pre‑seed through Series A and larger. Senator Neal raised concerns about selection criteria and whether an emphasis on GOED alignment, high wages and health insurance could disadvantage early‑stage or non‑tech entrepreneurs; Yeager said the bill was intended to provide flexibility and leave portfolio allocation decisions to the NCIC board. Senator Krasner asked about downside risk and remedies if a company defaults; Yeager and Saling said early‑stage investing carries losses as a normal part of venture portfolios and the program expects diversification and professional management to protect the corpus. Senator Daley questioned removing the chancellor of the Nevada System of Higher Education from the board and replacing that seat with the GOED executive director; Yeager said the change was intended to avoid conflicts of interest if NCIC invested in university‑linked ventures, but agreed to consider alternatives.

Opposition and neutral callers were minimal or absent at the hearing; Katrin Ivanoff registered opposition by phone, citing a desire for conflict‑of‑interest safeguards for officials and their families. The committee did not take a roll‑call vote at the hearing.

Ending: The hearing closed with committee members debating risk, governance and selection criteria; sponsors indicated willingness to work on board composition, investment thesis and other technical language before a work session.