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Maine Fund Will Help Companies Bridge Financing Gap

March 29, 2004

A new fund developed by the Maine Technology Institute (MTI) is expected to lead to greater commercialization of technologies in the northeast state. Created through a reserved proportion of MTI’s annual grantable funds, the Accelerated Commercialization Fund (ACF) will allow previously funded MTI companies the chance to achieve significant growth. To qualify for funding, companies must at a minimum demonstrate significant potential for financial and economic development returns.

The financing gap that exists between some companies' research and development (R&D) and sales is the motivating force behind the Maine fund. MTI plans on the investments piggybacking on other investors' terms, generally in the form of equity, and either converting existing debt or providing additional capital to help advance new products toward the market.

Approximately $1 million will seed the ACF, with two to three investments made each year. MTI will select only those companies with high growth potential and interest in equity investments, with consideration given to a variety of factors — an investment's perceived impact for Maine, its potential for return to MTI, quality and relationship of investment partners, and past performance with MTI-funded projects.

The fund's guidelines include:

  • Companies must have previous MTI funding.
  • Investments may be up to $500,000; follow-on investments will be considered on a case-by-case basis.
  • A minimum of one-to-one cash match is required and must be at-risk in the company coincident with the MTI investment.
  • Match funding may come from institutional investors, outside accredited investors or other financial institutions. And,
  • Companies that receive ACF funding remain eligible for MTI R&D funding programs, such as seed grants and development awards.

Also outlined within the guidelines are the fund's possible uses. ACF funds, while working to advance technology commercialization, can be used for development, marketing, operations, working capital and similar items. Neither the ACF nor matching funds may be used to pay earlier investors or prior debt. Companies receiving funding also must show documented interest from at least one potential or current customer.

For more information on the ACF fund and other MTI award programs, visit: http://www.mainetechnology.org/proposal.asp