The New Jersey Economic Development Authority (EDA) announced the creation of the NJ CoVest Fund, which will provide growth capital to early-stage technology and life sciences companies, driving up to $9 million in investment. The NJ CoVest Fund will fill a market need in New Jersey, ensuring the availability of capital at a company’s critical stage between product development and commercial operation expansion, where limited funds are currently available and a funding gap exists.
“In addition to the State’s renowned higher education and university research systems, New Jersey is now home to more than 22 coworking facilities, 11 incubators, and six accelerators, creating an influx of opportunities to help early-stage companies grow,” EDA Chief Executive Officer Melissa Orsen said. “The NJ CoVest Fund will help to ensure that we are able to retain these innovative companies in the Garden State by providing them with the capital they need to commercialize new technologies and scale commercial revenues.”
The NJ CoVest Fund will provide seed 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. Under the $3 million fund, companies will be eligible for between $100,000 – $250,000; NJ CoVest funds must be matched $2 of external funding from private, outside investors for every $1 funding requested from the Fund. Up to $250,000 of funding per company may be available. CoVest funds will feature three percent interest and 10-year maturity, with no payments due for the first seven years.
Eligibility requirements include:
A complete list of NJ CoVest Fund program guidelines and company requirements can be found at www.njeda.com/njcovest. The EDA expects to begin accepting applications in the third quarter of 2017.
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