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Maryland's TEDCO Tops List of Most Active for Early-stage VC

July 25, 2005

For the second year in a row, the Maryland Technology Development Corporation (TEDCO) was the most active source of early-stage or angel capital, according to the July issue of Entrepreneur magazine. The list of the top 100 funds, based on number of deals made during 2004, is based on the results of the quarterly MoneyTree survey published by PricewaterhouseCoopers, Thomson Venture Economics and the National Venture Capital Association (NVCA).

Forty-six of the venture capital sources on the list are from California; 17 are from Massachusetts. Some of the well-known angel organizations, such as Tech Coast Angels, Band of Angels and the Angels Forum and the Halow Fund (all from California), were in the top firms with 7-8 deals.

To get on the list for 2004, funds had to report at least three deals, up from the two-deal minimum required last year. TEDCO made 15 deals in 2004, the same number as it had in 2003 when it also received the top spot on the list.

While several of the list's funds may have public funds in their available capital pools, several funds directly supported or administered by state or local tech-based economic development organizations and councils made the list this year. Examples include:

1. Maryland Technology Development Corporation (TEDCO) - The Maryland Technology Transfer Fund provides investments to companies and eligible federal labs or universities. Companies are required to provide 50 percent matching funds. Funds may be used for research and development activities intended to develop a specific technology or technology package for commercialization. Eligible companies must employ fewer than 15 people or be a spinoff of a federal laboratory or university in Maryland founded less than five years prior to application. Also, the company must be pre-venture capital financing or be pre-revenue. Currently funded companies are within the sectors of bio-therapies, devices and diagnostic tools, engineering, nanotech, network and wireless solutions, and software.

41 (tied). Innovation Works (Pennsylvania) - The Innovation Investment Fund invests seed capital in early-stage technology companies in the Southwestern Pennsylvania region. To be considered for an investment, companies must be located in the region or relocate. They also must offer substantial potential for future growth through the development of an innovative technology, or innovative application of a technology in industries such as computer software and hardware, communications, robotics, advanced manufacturing or biotechnology. Innovation Works made four deals in 2004. http://www.innovationworks.org/html/programs/iif.jsp

41 (tied). Maryland Department of Business and Economic Development - The Challenge Investment Program provides financing for seed-stage companies. Companies are required to obtain a co-investment match or commitment of one-to-one, and have no more than 25 employees and annual sales revenues of $1 million or less. Industry group preference includes biotechnology, telecommunications and information technology. DBED made four deals in 2004. http://www.choosemaryland.org/business/financing/investment.asp

41 (tied). New Jersey Technology Council - The $80 million Venture Fund makes catalytic seed, start-up, and early-stage venture capital investments. The firm actively partners with entrepreneurs to build unique, leading-edge businesses that drive superior returns for investors and economic growth in the community. In 2003, the fund was licensed as a Small Business Investment Corporation by the Small Business Administration. NJ Tech Council made four deals in 2004. http://www.njtcvc.com/index.asp

68 (tied). Center for Innovative Technology (Virginia)  The Growth Acceleration Program (GAP) helps to close the funding gap for pre-seed and seed-stage technology companies. CIT offers up to $100,000 in GAP funding to early-stage tech companies having a high potential for technology commercialization, rapid growth and downstream private equity financing. To qualify for GAP funding, companies must be located in Virginia or agree to relocate, be involved in either IT, biotechnology, communications, nanotechnology, materials or sensors and provide evidence for a one-to-one match. CIT made three deals in 2004. http://www.cit.org/gap-04.asp

The full list is available in the July issue of Entrepreneur: http://www.entrepreneur.com/listings/vc100/0,5946,,00.html

Editor's Note:  The significant roles publicly supported angel and VC funds can play in certain regions may be overlooked by the equity industry. It could be, in part, because several programs do not report their deal flow to respected surveys such as MoneyTree. Did your program make three or more investments in 2004? More information on how to participate in MoneyTree is available at http://www.nvca.org/ .