(Photo by Flickr user Maryland GovPics, used under a Creative Commons license)
TEDCO has new funding for startups who are past the seed funding stage but not quite ready for VCs.
Maryland’s quasi-public agency that helps early-stage companies received $1 million from the state to create the Gap Investment Fund.
The funding was provided in Gov. Larry Hogan’s 2018 budget, which passed the General Assembly during its recently completed 90-day session. As a result, the money will first be available on July 1.
In a statement, Hogan said the funding can provide a “much-needed lifeline” for companies. It’s one of the most significant moves for the tech community to come out of this year’s legislative session in Annapolis.
"We don't want them to feel they need to leave the state of Maryland to continue to grow. We want them to grow here."
TEDCO will look to provide investments of $200,000 to $500,000, TEDCO President John Wasilisin said. It has to be matched from outside investors, and must be used to hire new employees.
The program adds another layer of funding available to startups from TEDCO, which provides $100,000 investments to companies through its Seed Investment Fund, and now manages the Maryland Venture Fund for later rounds. In providing that funding, Wasilisin said TEDCO sees companies that need additional funding as they transition from validating a product toward entering the market.
“There is still a gap between companies that are getting our seed fund and companies that are ready to qualify for venture funding,” Wasilisin said.
That has implications for efforts to grow the state’s tech community. When they can’t find funding to keep growing, companies begin looking out of state, Wasilisin said.
“We don’t want them to feel they need to leave the state of Maryland to continue to grow,” he said. “We want them to grow here.”
Wasilisin is optimistic, saying he anticipates the demand will “far outstrip the supply of dollars” that is available this year.
Companies do not need previous investment from TEDCO to be eligible for the funding, Wasilisin said. The new program comes amid moves by TEDCO to broaden its reach in the state.
“We really want to make sure that we’re serving the entire economic landscape,” Wasilisin said.