With current tax incentives set to expire by July, Gov. Phil Murphy is urging the Legislature to act on his proposal aimed at bringing more venture capital investment to New Jersey and recharging the state's innovation ecosystem.

The New Jersey Innovation Evergreen Fund, Murphy said, partners potential startup businesses with firms that believe in those businesses.

"In 2007, New Jersey ranked fifth in the country in terms of total venture capital investments, roughly $1.3 billion," Murphy said during a visit Wednesday to North Brunswick's CCIT Life Sciences Incubator. "Over the ensuing 11 years ... we not only dropped 10 spots, but the amount of venture capital finding its way annually into New Jersey startups has been cut in half."

Over the same period, Murphy added, venture capital investments increased in competing states such as New York and Massachusetts.

"So it isn't that venture capital stopped flowing, it just flows elsewhere, away from New Jersey," he said.

As proposed, the fund would raise $250 million over five years by competitively auctioning state tax credits to New Jersey corporations. Auction winners, Murphy said, may not be those who offer the best price, although that'll be a factor. The state is also interested, he said, in entities committed to growing the startup system in New Jersey.

"The incentives that are currently on the books expire on June 30th," Murphy said.

The fund would then invest the auction proceeds with at least $250 million from venture capital firms, into promising startups chosen by the firms.

Returns to the fund over time would be reinvested to help grow other New Jersey-based startups.

"Founders and entrepreneurs will come and stay in New Jersey if they see their business can be adequately funded and mentored by experienced, successful investors and advisers," said Jim Gunton, managing partner of New Brunswick-based Tech Council Ventures. "Innovation Evergreen Fund provides New Jersey the level playing field necessary to attract and retain the best and the brightest."

Assemblyman Andrew Zwicker, D-Somerset, who was on hand for Murphy's event, said he believes the proposal is "good to go on the legislative side." A legislative hearing last week revealed overwhelming support for public-private partnerships that would reinvigorate the state's innovation economy, he said.

"In fact, the message was really, what's taking so long?" Zwicker said.

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Contact reporter Dino Flammia at dino.flammia@townsquaremedia.com.