Mark Kvamme, who recently stepped away from operations at venture capital firm Drive Capital LLC, is floating the idea an Ohio-focused private analog to a "sovereign wealth fund," a source confirmed.
The fund has not been created, but Kvamme has started early discussions with high-net-worth individuals and some institutional "investors interested in the future economic vitality of Ohio," said one of the people approached.
Business Insider first reported on the proposal, citing anonymous sources close to the talks.
Kvamme, reached while out of the country, said he could not comment.
Called a permanent trust fund when not operated by a national government, the vehicle sells shares and invests the capital in a number of assets – stocks, bonds, hedge or venture funds, and equity stakes in companies. Unlike a VC or private equity fund, however, it seeks to hold and grow those assets instead of flipping them to sell for a profit.
With the working title "Ohio Fund," this one would be devoted to strengthening the state's economy.
Nations including Norway, Chile, Kuwait and Israel operate sovereign wealth funds, according to a report by the Brookings Institution, and a handful of U.S. States have permanent trust funds created from severance taxes on natural resource extraction.
The government of Singapore founded the fund Temasek in 1974 – as of this March it had grown to $297 billion in value.
Former Gov. John Kasich had proposed a severance tax on fracking to create such a fund, according to the 2016 Brookings paper, but that idea did not go forward.
Kvamme also had envisioned a fund when creating the private nonprofit JobsOhio as a statewide economic development organization in 2011. But the state constitution forbids the state or any affiliate from taking equity stakes in companies. Although independent, JobsOhio owns the rights to the state-run liquor franchise and is funded through liquor sale profits.
A former partner at Sequoia Capital in Silicon Valley, Kvamme served briefly in Kasich's cabinet before creating JobsOhio. The Californian decided to make Ohio his permanent home. In 2012 he recruited Chris Olsen, a Cincinnati native and Sequoia partner, to co-found Drive in Columbus.
Drive announced raising $1 billion in two new funds this July, a fourth funding cycle, and broadened its investment territory across most of the country.
In October, Kvamme announced he was transitioning to partner emeritus and wanted to keep his focus inside the state. On the side he owns a GT racing team.
In a transition planned since inception, Olsen became the firm's solo leader.
