TNInvestco criticism from Advantage Capital

Scott Zajac, senior managing director, Advantage Capital Partners in St. Louis, was apparently emboldened by Larry Coleman's lawsuit, in which Coleman demands access to information deemed privileged by the State commissioners who chose six TNInvestco winners, in the first batch of new funds in the state's innovative capital-formation program.
Zajac told VNC today that, although he said he is not alleging "illegality" on the part of the commissioners, he thinks the TNInvestco process itself may be have been 'corrupted'.
Here's Zajac in his own words, which he sent us via e-mail after reading about Coleman's litigation in Davidson County's Chancery Court:
"Coleman Swenson is without a doubt one of the most qualified firms in the state and the idea that they were not even in the top ten is absurd and suggests a very flawed or corrupt selection process. Our firm did make a similar FOIA request through counsel for the scoring matrix immediately after the results were announced and the department immediately denied the request and made it clear that they intended to keep the selection scoring matrix secret and away from public view which seems entirely inconsistent with the transparency one would want in a program with over $100 million flowing out of the state coffers.
"I have never met Dr. Coleman but he contacted me late last year about his dismay with the process. He seemed more concerned with the integrity of government and waste of taxpayer money but I was not aware that he was taking legal action. I can't imagine why a state official would not want to have this process be open and transparent. The state should have done the first part of the selection process where they qualified firms under the statute and then let the private market pick the winners and losers based on merit versus political appointees picking based on other factors. If they had taken this path firm's like Dr. Coleman's who already had legitimate commitments from insurance companies would be pumping money into start ups today. Instead the process is bogged down and firms already going back and asking the legislature for even more money targeted at specific VC firms picked by political appointees. Ironically, one of the safeguards for taxpayers in programs like NMTC and CAPCO is the recapture of tax credits for any non-compliance the law. This feature was curiously removed from the original bill proposed in the legislature based on a request from Commissioner Farr and others. In essence, this administration is handing out money to firms they select today and the massive cost does not hit the state until the next governor is in place. If the TNVESTCO firms have not complied with the law there is no ability whatsoever to recapture tax credits. If anything is done in the legislature it should be recapture provisions for non-compliance to protect tax payers and no new earmarks for firms preselected by the administration."
By the way, Coleman Swenson's out of state partner in the TNInvestco competition was Texas Ventures, represented by Scott Crist. Other VNC TNInvestco coverage. - Ed.