The Maryland Venture Fund has two primary vehicles under which we make investments.
Challenge Investment Program
This program provides financing for seed-stage companies to cover a portion of the initial costs associated with bringing new products to market. Initial investments of $50,000 to $100,000 are made up, with incremental investments to a maximum of $150,000. These incremental investments are awarded based upon the client’s performance and the client’s ability to achieve milestones set by the Maryland Venture Fund at the time of the initial closing.
Requirements:
• The business must have no more than 25 employees and annual sales of less than $1 million.
• A minimum 1:1 co-investor match is required.
• Applicants are limited to high tech companies whose principal place of business is located in Maryland.
• The company must remain in Maryland for at least three years.
• The company must be positioned for additional Venture Capital.
How to Apply
Enterprise Investment Fund Program
The Enterprise Investment Fund makes direct equity investments in emerging technology companies, usually at the first round of institutional financing. The Enterprise Investment Fund works with emerging companies to move them into their next stage of development as a viable business. The amount of investment ranges from $150,000 to $500,000. Enterprise investments are generally in the form of equity, but follow the terms of the lead investor.
Requirements:
• Applicants must be in a technology industry. Areas of technology include life sciences–therapeutics, medical devices and diagnostics and information technology–software, communications and IT security
• The applicant must agree to maintain its principal place of business in Maryland for five years.
• A minimum 3:1 match by a sophisticated investor is required.
How to Apply
Other Investment Programs
Enterprise VCLP Fund
The Enterprise Fund has invested $11.5 million in nine Venture Capital Limited Partnerships (VCLP’s) since fiscal year 1994. Two were made in fiscal year 1996, five in fiscal year 2000, one in fiscal year 2001, and one in fiscal year 2003.
FIPS Certification Grant Program
In FY05, DBED initiated a program that would provide small grants to technology companies needing proper security certification to do business with the federal government. The Maryland Federal Information Processing Standards (“FIPS”) certification grant program will assist Maryland companies working to obtain FIPS 140-1 and FIPS 140-2 certification for encryption. DBED will also consider, on a case by case basis, assisting companies seeking certification for other FIPS standards (e.g., FIPS 197: Advanced Encryption Standard (AES) of November 2001). Maryland-based companies with no more than 30 full-time employees and annual revenues that do not exceed $5 million are eligible to apply for a FIPS certification grant. Once approved, the company may receive up to 40 percent, not to exceed $50,000 of the eligible costs involved in FIPS certification, such as consulting, engineering, and testing and evaluation fees, as well as, other costs directly related to the certification process. Funding will be provided to the company once it has submitted expense reports relating to FIPS certification.
Maryland/Israel Development Fund (MIDF)
A Maryland/Israel international research and development fund was established in November 2004. Israel has similar international R&D funds at the national level with 20 countries including the United States, Canada, Britain, Finland, South Korea and Singapore. Investment may range from $100,000 to $300,000, half from DBED for the Maryland company and half from the Ministry of Industry, Trade and Labor (“MOIT”) for the Israeli firm. The funds can be used for the R&D expenses of the project. Company matching funds are required, equal to minimum of fifty percent of total project costs. For products successful in the market, investments will be repaid with interest. The mission of the MIDF is to encourage collaboration between Maryland and Israeli companies creating high technology products. Funding for this program will be provided in equal amounts by each government. The investments will be structured in a manner similar to that of the CIP, with payback of investment through royalties earned from product revenues.
