InvestMaryland money nearly ready to flow

Nick Sohr —  June 15, 2012 — 1 Comment

By Nick Sohr, Managing Editor, MDBIZNews

The Maryland Venture Fund Authority will tap a handful of venture capital firms by early July to invest the lion’s share of the state’s $84 million InvestMaryland program, authority Chairman Peter Greenleaf said Thursday.

“You can feel comfortable that the range of investments [is] what we’re looking at, from early to late stage, across all areas of technology and entrepreneurialism in the state,” Greenleaf told some 200 entrepreneurs and investors at a forum in Rockville.

On June 28, the authority will receive recommendations from a consultant as to which firms to invest with and then will announce its decisions by the first week of July, according to Greenleaf.

Private venture capital firms will invest $56.4 million, or about two-thirds of the money raised for InvestMaryland, the largest capital program in the State’s history.

The authority expects to choose between five and eight firms that would receive between $7 million and $12 million each from the program. Those firms will invest in seed, early stage and growth companies, with a focus on information technology and life sciences. They will return to the state all of the principal and 80 percent of the profits from successful investments.

Another $20.7 million will be invested by the state’s Maryland Venture Fund, which will direct attention to seed and early stage startups. The fund, originally seeded with $25 million, has seen returns of about $64 million and helped create 2,000 jobs over its 17 year history.

“The goal [of InvestMaryland] is to create thousands of jobs,” said Christian Johansson, secretary of the Department of Business and Economic development and the architect of the venture capital program. “The goal is to position Maryland as a leader in science, security discovery, innovation.”

The remaining $6.9 million will go to the Maryland Small Business Development Financing Authority, another DBED business finance program.

State officials expect the InvestMaryland program to deliver much-needed capital and financial assistance to 200 to 400 businesses and spark interest from outside investors in individual firms and the state’s startup community as a whole.

The investments of the Maryland Venture Fund have been followed by $1 billion in private capital, according to Johansson.

InvestMaryland is a much larger injection of capital into the market. The program raised $84 million — $14 million more than expected — by auctioning $100 million in tax credits to insurance companies.

The state received the first $28 million payment this month, and will receive the same amount in 2013 and 2014.

“We’re trying to not just create assets, but create long-standing, lasting impact to the state, which will include jobs that reside here,” said Greenleaf, who is also the president of MedImmune.

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    [...] and life sciences will also be a focus of the InvestMaryland program, which in March raised $84 million that will be invested in seed-, early and growth-stage [...]

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