As part of a newly-launched economic development strategy, New Jersey Gov. Phil Murphy proposed yesterday the creation of a $500-million fund to pump resources into Jersey-based startups.

The NJ Innovation Evergreen Fund will raise half the cash target by auctioning state tax credits at a discounted rate. The other half will come by way of matching dollars from VC firms looking to invest in the area.

“We’ve had a very sort of blunt-instrument, one-size-fits-all, big-company-focused tax incentive program that was our whole strategy,” Murphy told the New York Times yesterday. “And almost nothing toward the start-up community.”

As part of the deal, companies must be based in — or relocate to — New Jersey to become eligible for funding through the five-year plan. The state won’t be solely responsible for vetting the companies, though: it will instead look to partner with investors who’ve already done their due diligence.

wow. $500mm. that's like 6 times the size of Innovate in PA. cc @WaterfrontVent @hopeworkscamdenhttps://t.co/ez1WAfDX6b

— Bob Moul (@bobmoul) October 1, 2018

“State-level venture capital funds have thrived elsewhere, but with our talent and location, the Innovation Evergreen Fund can help us become the model for the country,” Murphy said at the announcement of the economic strategy. “Our fund will be the first to enlist some of the very corporations who participate as real partners in the innovation ecosystem.”

In Philly, the immediate reference to a program like this is StartUp PHL, the city’s startup-boosting (albeit much, much smaller) investment initiative put together by the City of Philadelphia’s Department of Commerce and the Philadelphia Industrial Development Corporation. Through the initiative’s first investment fund, guided by University City VC firm First Round Capital, about a dozen companies received $2.2 million in funding.

For the second fund, Ben Franklin Technology Partners — the state-backed seed and early stage capital provider whose investment thesis is about economic development in Pennsylvania — was tapped as overseer. Fund two looks to deploy $5 million into Philly-based companies .

Across the river from Philly, in Camden N.J., the NJ Innovation Evergreen announcement sparked interest among startup types.

“You don’t know how many people sent me that,” Waterfront Labs cofounder Khai Tran said of the New York Times article. “Our Slack channel went crazy.”

Tran, who started “innovation hub and community center” Waterfront Labs in 2016, said startup growth was a key piece of  economic development, and providing them with funding was a more viable economic development strategy for the state.

“We couldn’t be happier,” Tran said. “This is what we’ve been waiting for.”

But Dan Rhoton, founder of youth development nonprofit Hopeworks Camden says the challenge to the state initiative will be to target areas where the funds will have the greater impact.

“This could be either a transformative moment for the state or yet another policy that will go nowhere,” Rhoton said. “Will the state invest in diverse communities and under-invested communities? That could leverage the impact of those fund tremendously.”