Maryland Technology Development Corporation (TEDCO) is once again accepting applications from startups seeking investment from several of its funds that were put on hold in the middle of 2019.
In June, the state-backed organization stopped making investments from its seed funds, Builder Fund, Rural Business Innovation Initiative and Maryland Venture Fund while it created regulations to comply with legislation passed last year by the Maryland General Assembly. These regulations followed a state legislative audit which was critical of the Maryland Venture Fund, which invests in growth companies, for investing in businesses that weren’t found to be primarily based in Maryland, and lacking policies to prevent conflict of interest on a Maryland Venture Fund advisory committee.
Now, TEDCO has adopted new regulations, and is opening applications for the four funds.
“It took a lot of effort and we worked very closely with the attorney general to ensure that the regulations met what we thought were the needs of the entrepreneurs in the region and also the desires of the legislature and what they want TEDCO to be, and also to ensure we’re compliant with the law,” said TEDCO EVP Stephen Auvil, who became the acting leader of the organization after previous CEO George Davis stepped down over the summer.
The online application process for each fund is one result of the new regulations. Each application will be reviewed by TEDCO’s investment committee, which was also created with the new regulations. Among the factors they’ll be considering is whether a business qualifies based on its economic impact. That means it has a headquarters here and more than 50% of its employees are based in the state, or can show that it makes a “substantial economic impact” in the state, as defined by the law.
For now, the Maryland Venture Fund is only accepting applications from existing companies because the Maryland Venture Fund Authority does not have a quorum of members to begin investing again. TEDCO hopes this fund will be able to begin investing in new companies the first quarter.
Along with the four funds, TEDCO also provides funding through the Maryland Innovation Initiative and the Maryland Stem Cell Research Fund. These were not affected by the regulations.
Here’s a look at the four funds, and the max investment from each:
- Seed funds — Early-stage funding, including TEDCO’s Technology Commercialization Fund ($200,000) Cybersecurity Investment Fund ($200K), Life Science Investment Fund ($200,000) and GAP Fund ($500,000)
- Builder Fund — Pre-seed funding for disadvantaged entrepreneurs ($100,000)
- Rural Business Innovation Initiative Program — Funding for rural startups ($25,000)
- Maryland Venture Fund — Growth-stage companies ($250,000 to $1.5 million)