INCLUSIVE VENTURE INVESTMENT

Illinois General Assembly - Full Text of HB2937

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104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
HB2937

Introduced 2/6/2025, by Rep. Maurice A. West, II

SYNOPSIS AS INTRODUCED:

New Act

Creates the Inclusive Venture Investment Act. Provides that the State
Treasurer shall create a Direct Matching Funds Program. Provides that the
purpose of the program shall be to leverage State-managed funds for
investments in minority-owned venture capital firms, minority-owned
financial managers, and minority-led startups. Sets forth provisions for
investment requirements and incentives; administration; transparency and
reporting; oversight and compliance; confidentiality; and rulemaking.
Effective July 1, 2026.
LRB104 11833 SPS 21923 b

A BILL FOR

HB2937
LRB104 11833 SPS 21923 b
1

AN ACT concerning State government.

2

Be it enacted by the People of the State of Illinois,
3
represented in the General Assembly:

4

Section 1.
Short title.
This Act may be cited as the
5
Illinois Inclusive Venture Investment Act.

6

Section 5.
Findings.
The General Assembly finds and
7
declares:
8

(a) Illinois has a vibrant entrepreneurial ecosystem but
9
lacks equitable access to capital for minority entrepreneurs,
10
venture capital firms, and financial managers.
11

(b) Minority-owned financial management firms, such as
12
Ariel Investments, face systemic barriers to accessing
13
institutional portfolios despite proven track records of
14
success.
15

(c) Programs such as Chicago's 1871, Discovery Partners
16
Institute, and minority-owned financial firms play a crucial
17
role in fostering entrepreneurship, innovation, and economic
18
growth among underrepresented groups.
19

(d) This Act will drive equitable economic growth by
20
ensuring significant institutional capital flows to
21
minority-led startups, minority-owned venture capital firms,
22
and minority-owned financial management firms.

HB2937
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LRB104 11833 SPS 21923 b
1

Section 10.
Definitions.
As used in this Act:
2

"Covered institution" means:
3

(1) public and private universities, colleges, and
4

institutions of higher education with endowments or
5

investment portfolios exceeding $50,000,000;
6

(2) museums, cultural centers, and nonprofit
7

organizations with endowments or investment portfolios
8

exceeding $25,000,000 or receiving cumulative State
9

funding or tax exemptions exceeding $1,000,000 annually;
10

(3) nonprofit hospitals and healthcare systems with
11

investment portfolios exceeding $50,000,000; and
12

(4) public pension funds or retirement systems of
13

State or local governments.
14

"Minority-led startup" means a business that:
15

(1) is headquartered in this State or has significant
16

operations in this State; and
17

(2) is at least 51% owned and controlled by one or more
18

minority persons, women, or persons with disabilities, as
19

those terms are defined in the Business Enterprise for
20

Minorities, Women, and Persons with Disabilities Act.
21

"Minority-owned financial manager" means a financial firm,
22
asset manager, or investment manager that:
23

(1) is at least 51% owned by one or more minority
24

persons, women, or persons with disabilities, as those
25

terms are defined in the Business Enterprise for
26

Minorities, Women, and Persons with Disabilities Act; and

HB2937
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LRB104 11833 SPS 21923 b
1

(2) the management and daily business operations are
2

controlled by one or more of the owners described in
3

paragraph (1) of this definition.
4

"Minority-owned venture capital firm" means a financial
5
firm or investment manager that:
6

(1) is at least 51% owned by one or more minority
7

persons, women, or persons with disabilities, as those
8

terms are defined in the Business Enterprise for
9

Minorities, Women, and Persons with Disabilities Act; and
10

(2) the management and daily business operations of
11

which are controlled by one or more of the owners
12

described in paragraph (1) of this definition.
13

"Special investment initiative" means a program,
14
incubator, accelerator, or similar initiative that:
15

(1) provides resources, mentorship, training, or
16

capital to entrepreneurs who are minority persons, women,
17

or persons with disabilities, as those terms are defined
18

in the Business Enterprise for Minorities, Women, and
19

Persons with Disabilities Act; and
20

(2) operates in this State or primarily supports
21

businesses located in this State.
22

"Special Investment Initiative" includes, but is not
23
limited to, university-led startup programs, nonprofit
24
entrepreneurship accelerators, and private-sector incubators
25
aimed at supporting underrepresented founders.

HB2937
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LRB104 11833 SPS 21923 b
1

Section 15.
Investment requirements and incentives.
2

(a) The State Treasurer shall create a Direct Matching
3
Funds Program. The purpose of the program shall be to leverage
4
State-managed funds for investments in minority-owned venture
5
capital firms, minority-owned financial managers, and
6
minority-led startups.
7

(b) For every dollar invested by a covered institution in
8
an eligible minority-owned financial manager, venture capital
9
firm, or minority-led startup, the State Treasurer shall
10
provide a matching contribution of up to 50 cents per dollar
11
using existing funds managed by the State Treasurer.
12

(c) Investments that exceed annual performance benchmarks,
13
as determined by historical market returns for venture capital
14
or institutional portfolios, shall receive an additional 25
15
cents per dollar in matching funds from the State Treasurer.
16

(d) An institution whose participating portfolio
17
underperforms the benchmarks for a period more than 5 years
18
may be prohibited from participating in the program until the
19
institution can demonstrate significant improvement with
20
performance above the benchmark for 8 consecutive quarters.
21

(e) The matching funds provided in accordance with this
22
Section shall be:
23

(1) capped at $10,000,000, subject to available State
24

resources;
25

(2) restricted to investments made in firms or
26

businesses based in this State with significant operations

HB2937
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LRB104 11833 SPS 21923 b
1

in this State; and
2

(3) allocated based on a review and selection process
3

established by the State Treasurer by rule.
4

(f) To be eligible to participate in this program, covered
5
institutions shall allocate at least 20% of their investment
6
portfolios to:
7

(1) minority-owned venture capital firms;
8

(2) minority-led startups;
9

(3) minority-owned financial managers; or
10

(4) special investment initiatives supporting diverse
11

founders, including:
12

(A) university startup incubator programs aimed at
13

supporting underrepresented entrepreneurs; and
14

(B) nonprofit business accelerator programs
15

providing mentorship, training, and resources for
16

minority founders.
17

(g) All qualifying investments shall serve the purpose of
18
fostering diversity, equity, and inclusion in this State's
19
financial and entrepreneurial ecosystem.
20

(h) All participating covered institutions shall submit
21
documentation of qualifying investments, including detailed
22
reporting on recipients' diversity status and operations in
23
this State.

24

Section 20.
Administration.
The State Treasurer shall
25
administer the Direct Matching Funds Program, including:

HB2937
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LRB104 11833 SPS 21923 b
1

(1) verifying eligibility of institutions and
2

recipients;
3

(2) distributing matching funds to qualifying
4

institutions;
5

(3) publishing an annual report detailing the matching
6

funds distributed, recipients, and outcomes, including
7

jobs created, capital raised, and economic impact; and
8

(4) reallocate unused matching funds at the end of the
9

fiscal year proportionally among participating
10

institutions based on documented investment needs.

11

Section 25.
Transparency and reporting.
12

(a) A covered institution participating in the program
13
shall submit an annual report to the State Treasurer,
14
including:
15

(1) the total value of their endowments or investment
16

portfolios;
17

(2) the percentage of investments allocated to
18

minority-owned venture capital firms, minority-owned
19

financial managers, minority-led startups, and special
20

investment initiatives;
21

(3) the names of minority-owned financial managers,
22

venture firms, and startups supported; and
23

(4) year-over-year changes in investment diversity.
24

(b) The State Treasurer shall make the reports submitted
25
under subsection (a) publicly accessible, including detailed

HB2937
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LRB104 11833 SPS 21923 b
1
scorecards that ranks institutions based on the percentage of
2
investments allocated to minority-owned financial managers,
3
venture capital firms, startups, and special investment
4
initiatives.
5

(c) A special investment initiative receiving funds under
6
this Act shall submit an annual performance report to the
7
State Treasurer, including:
8

(1) the number and percentage of minority-led startups
9

supported; and
10

(2) outcomes such as capital raised, jobs created, and
11

businesses launched.

12

Section 30.
Oversight and compliance.
13

(a) The State Treasurer shall oversee the implementation
14
and enforcement of this Act, including the collection and
15
publication of reports.
16

(b) The State Treasurer may conduct audits of covered
17
institutions and special investment initiatives to ensure
18
compliance with this Act. A covered institution participating
19
in the program shall comply with an audit conducted by the
20
State Treasurer.
21

(c) An institution that participates in this program shall
22
meet reporting and compliance standards to retain program
23
eligibility.
24

(d) An institution that fails to meet the 20% investment
25
allocation requirement over 2 consecutive years shall lose

HB2937
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LRB104 11833 SPS 21923 b
1
eligibility to participate in the program for a period of no
2
more than 5 years.
3

(e) An institution that fails to meet reporting
4
requirements or misuses matching funds may be required to
5
repay any funds distributed under this Act.

6

Section 35.
Confidentiality.
The State Treasurer may
7
redact sensitive or proprietary financial information that
8
does not further the intent of this Act.

9

Section 40.
Rulemaking.
No later than 6 months after the
10
effective date of this Act, the State Treasurer shall adopt
11
any rules necessary to implement this Act.

12

Section 99.
Effective date.
This Act takes effect July 1,
13
2026.

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