EDA Launches NJ CoVest Fund to Provide Seed Capital to Early Stage Companies
TRENTON, N.J. (August 29, 2017) – Emerging technology and life sciences companies can now apply for seed capital through the new NJ CoVest Fund, offered by the New Jersey Economic Development Authority (EDA). The NJ CoVest Fund is designed to fill the funding gap that occurs between product development and commercial operation expansion, while at the same time helping New Jersey companies thrive and compete in the global marketplace. The online application is available at www.njeda.com/njcovest.
The NJ CoVest Fund, which was approved by the EDA Board in April, provides this funding to New Jersey-based early-stage technology companies in the form of convertible notes with warrants, requiring a negative pledge and springing lien on protected intellectual property. With a total funding pool of $3 million, eligible technology companies can receive investments ranging from $100,000 to $250,000. EDA expects to fund approximately two dozen (between 12 and 30) companies over the next three years under this program. NJ CoVest funds must be matched by $2 of external funding from experienced outside investors for every $1 of funding requested from the Fund. NJ CoVest funds will feature three percent interest and 10-year maturity, with no payments due for the first seven years.
“The EDA keeps a finger on the pulse of the market to adapt and expand its portfolio of solutions that meet the needs of businesses and encourage them to grow in New Jersey,” EDA Chief Executive Officer Melissa Orsen said. “The NJ CoVest Fund will help by providing funding for successful start-up technology and life sciences companies that need a boost to get to the next stage of growth.”
A complete list of NJ CoVest Fund program guidelines and company requirements can be found at www.njeda.com/njcovest.
The NJ CoVest Fund aligns with the EDA’s ongoing strategy to stimulate the growth of New Jersey’s innovation economy and drive commercialization of pioneering technology within the State. Among its myriad resources, the EDA has a long history of helping increase available capital for emerging companies by investing as a limited partner in venture capital firms that invest in New Jersey-based enterprises. To date, EDA has committed over $48 million to 14 venture capital funds since 1999. Cumulatively, these partner funds invested approximately 6x the EDA’s investment into more than 60 New Jersey early-stage technology and life science companies. Including other third-party investors, companies in the EDA venture fund portfolio received $2.3 billion of funding and employed almost 2,000 full time employees as of December 31, 2016.