Kate Nagle reports on GoLocalProv about another public investment gone wrong:
The closing of Nabsys, first reported by GoLocalProv, is likely to cost the state’s Slater Fund about $1 million and may have an impact on the Rhode Island pension fund.
Nabsys, LLC received over $40 million — including millions in investment and loans from both Rhode Island’s Slater Fund and Governor Gina Raimondo’s venture fund Point Judith in multiple rounds. Nabsys closed after it failed to find a merger partner or acquirer say sources.
Businesses open and close. That’s how the marketplace works. If Raimondo’s private investment firm wants to take the risk of investing, so be it. NABsys’s connection through Raimondo to the pension fund or the Slater Fund merits a closer look, but doesn’t appear to be nailed down, quite yet.
One question that comes to mind, nonetheless: Would it really be a “success” if a company backed by some investment through a publicly funded fund managed to merge itself out of existence or find an acquirer? I’m sure financial wizards would be able to explain how this all benefits the state, but most Rhode Islanders, it’s fair to say, see public investment in economic development and technology as intended to grow the economy and create jobs.
Of course, if the founders of a private company can make a big profit through a merger or acquisition, their financial backers will profit, too, which can be a wonderful thing, but these sorts of money-making ventures shouldn’t be an activity of government.