If it takes money to make money, North Carolina entrepreneurs may not be earning much of the green stuff any time soon.

Those familiar with the venture capital world say the state has never had a bunch of ready investors willing to plug money into risky startup companies. When the financial markets collapsed last fall, a dribble became a drip.

That drying up of capital isn't just bad news for the entrepreneurs trying to get their businesses off the ground. While a substantial number of fledging companies are destined to fail, some won't.

Some will become economic success stories, homegrown job creators, the best kind of economic development. Companies like SAS and Cree weren't always high-tech darlings of the Research Triangle. Not so long ago, they were just ideas that needed someone to put some money behind.

When those successes occur, whole communities benefit.

But as great as the need might be, should a public pension fund be targeting its investments to try to help create the next SAS or Cree?

State Treasurer Janet Cowell apparently believes the answer is yes.

Cowell is about to set aside $250 million of pension fund money to create a North Carolina-focused "Innovation Fund," an attempt to boost economic development in the state and help fill a venture capital void.

State law already allows up to 5 percent of the $66 billion pension fund to be invested in venture capital and hedge funds.

The difference is that those investments don't have the added goal of promoting the prospects of start-ups and other private firms here in North Carolina. The investment firms managing that money do so solely to get the best return for pensioners.

Although public pension funds in more than a dozen other states, including New York and California, engage in this kind of "economically targeted investing," critics say it can lead to riskier investments and lower returns.

In a recent interview, Cowell said that by taking steps to improve North Carolina's economy, she can help current and future state government retirees by improving state government finances and the ability of legislators to make pension fund contributions.

She's right. If the money provides a foundation for the growth of productive companies, the state will be better positioned to contribute to the pension fund and pensioners will receive good returns on the investments. Who, today, wouldn't wish to have been an early investor in Cree? If a portion of the money goes to the next SAS or Cree, everybody wins.

There's also a requirement that this new Innovation Fund have a "risk-adjusted rate of return" consistent with the rest of the pension fund's venture capital portfolio.

But some states have run into problems with these economically targeted investments. They can confuse purposes. A decision to help create jobs today can become trying to salvage existing jobs tomorrow.

The state pension fund has one purpose: to provide the best returns possible to provide the best benefits possible to state pensioners.

Scott Mooneyham writes for Capitol Press Association in Raleigh. Contact him at smooneyh@ncinsider.com.