May 14–A decade ago, when Massachusetts was also mired in recession, a Republican governor named Bill Weld rolled out an innovative plan to leverage the state’s most important resource, our brains,by starting an emerging technology fund to seed promising new companies. An up-and-coming legislator named Tom Finneran, then chairman of the House Ways and Means Committee, had this to say: “We’resupposed to put public money into speculative investments that the private markets won’t go near? Come on. Be serious.”

We have come full cycle. Finneran, now our tight-fisted speaker of the House, is today the chief backer of spending state money to nourish young promising technology companies. But rather than the $15 million Weld sought (and never got from the Legislature), Finneran wants $100 million in state money for the emerging technology fund. And this time it is our new Republican governor, Mitt Romney, a man who spent most of his career in the private equity business, saying, in effect: Come on.

Be serious.

The business community is atwitter over the Finneran Fund; my phone would not stop ringing yesterday with one testimonial after another.

(Where were these guys when higher ed was getting cut?) Depending on whom you talk to, the fund could be used for start-up capital for young companies, to fund academic-commercial research collaborations, or to provide loans to expand companies. David Begelfer, Massachusetts president of the National Association of Industrial and Office Properties, didn’t put a fine point on it this week when business began its push for the Finneran Fund: He said his members have vacant buildings to fill.

Things never change. We are slashing local aid, healthcare to the poor, education, you name it, and someone is always backing up the truck at the State House. Suddenly our needy technology companies go to the front of the welfare line?

If recent history teaches us anything, it is that a lack of investment capital is not our problem. In fact, the glut of capital was the gasoline that fueled the boom that created the bust. There is no lack of capital out there; there are hundreds of investment firms sitting on billions of dollars. What opportunities will the state see that the armies of venture capitalists do not? Do we really want to be getting in just as the pros are getting out?

Paul Ferri has been funding start-up companies in Massachusetts for more than 30 years. The venture firm he founded, Matrix Partners, was the money behind some of the hottest technology companies over the last decade, including Sonus Networks, ArrowPoint Communications, and Sycamore Networks. Ferri on the Finneran Fund: “It makes no sense at all. It would be better going to the top of the John Hancock Tower and [throwing] the $100 million off the roof.”

The one thing we don’t need, Ferri says, is more capital; venture firms are for the first time returning capital to investors because they can’t invest it well. “If there is anything that says it, that is it,” he says. “The business is overfunded. People have voted with their feet by giving the money back.”

Finneran says he has changed his mind about helping business over the past decade because so many other states that Massachusetts competes with are doing the same. “I am not suggesting anyone up here play venture capitalist with the public’s money,” he says. “But in the right hands, it can work, and it does not have to become welfare for people dreaming and scheming.”

There are plenty of places for government to help business and create jobs. Venture capital is not one of those places. Venture capital is an incredibly efficient business at finding niches and filling them. At a time of limited resources, state government has its own niches to fill — traditional things like providing education and helping those who fall between the cracks. Paul Ferri & Co. will take care of the rest.

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SONS, ARPT, SCMR,