Sec. 4. Follow-on investments
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/bill/116/hr/6403/ih/section-4A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
The Secretary shall allocate the amount appropriated under section 8(a)(2), and any future amounts appropriated to carry out this section under the authorization provided under section 8(b), to approved State programs to facilitate follow-on investments. To carry out the allocations under this section, the Secretary shall manage a competitive process, facilitated by an expert consultant from the private sector, to award funding to approved State programs to provide follow-on investments. A follow-on investment under subsection
(b)shall be in an amount that is not less than $5,000,000 and not more than $50,000,000. With respect to the expert consultant described in subsection (b)— the Secretary may pay management fees to the consultant in an amount that is not more than 0.5 percent of the co-investment funds managed by the consultant over the term of the program under this section; and the consultant may receive not more than 10 percent of the profit interest earned by the States participating in the program under this section from the proceeds of successful follow-on investments. Not later than 180 days after the date of enactment of this Act, the Secretary shall issue rules— to determine the eligibility of States that wish to participate in the program established under this section, which shall include the exclusion under section 3(d)(1)(B)(ii); to provide the manner in which States may make the follow-on investments described in this section; that shall permit multiple States to work together to invest in startups; and to determine an appropriate time to make the allocations required under this section with respect to follow-on investments in startups for which the original equity investments were made under the Program.