Chapter 06. Maryland Venture Fund
Regulation .01 Purpose.LinkCopy Citation
These regulations prescribe the objectives and investment policy of the Maryland Venture Fund, and the eligibility requirements, criteria, procedures and guidelines for investment by the Maryland Venture Fund.
Regulation .02 Objective.LinkCopy Citation
Through the Maryland Venture Fund, TEDCO seeks to support the State’s innovation and entrepreneurship environment by investing in opportunities that will have the potential to:
A.
Generate financial returns to sustain the investment programs that constitute the Maryland Venture Fund; and
B.
Foster economic growth throughout the State.
Regulation .03 Definitions.LinkCopy Citation
A.
In this chapter, the following terms have the meanings indicated.
B.
Terms Defined.
(1)
“Enterprise Fund” means the investment program established by §10-469 of the Act.
(2)
“Invest Maryland Program” means the investment program established under §§10-4A-01—10-4A-28 of the Act.
(3)
“Maryland Venture Fund” means the Enterprise Fund and the Invest Maryland Program.
Regulation .04 Investment Philosophy and Types of Qualified Businesses.LinkCopy Citation
TEDCO seeks to invest in businesses that have demonstrated financial success and continued growth potential appropriate for subsequent venture investments.
Regulation .05 Eligibility.LinkCopy Citation
TEDCO shall be satisfied that the applicant meets the requirements under COMAR 14.04.02.04.
Regulation .06 Investment Criteria.LinkCopy Citation
In General. In addition to the investment criteria set forth in 14.04.02.05, TEDCO shall consider the following investment criteria:
A.
Whether the market opportunity is appropriate for venture-stage investment;
B.
Whether the applicant, at the time it submits an application to TEDCO, is raising a minimum investment round of $2 million;
C.
Except for life sciences businesses, whether the applicant’s quarterly revenues equal or exceed $250,000;
D.
Whether the investment has the potential to generate returns of two times the amount of TEDCO’s invested capital not more than 8 years from the date of the investment;
E.
Whether the applicant presents a plausible exit strategy for investors;
F.
Whether the applicant can provide access to or information about its partners and customers;
G.
Whether the management team has the skills and ability to effectively secure an institutional venture investment or effectuate a successful exit for investors;
H.
Whether the applicant has the potential to secure institutional venture capital from other investors concurrent with Maryland Venture Fund; and
I.
Except for life science businesses, whether the applicant’s annual growth rate equals or exceeds 20 percent.
Regulation .07 Procedures and Guidelines for Investment Decisions.LinkCopy Citation
A.
In General. Except as provided in §§B and C of this regulation, TEDCO shall select businesses for investment by Maryland Venture Fund in accordance with the application process set forth in COMAR 14.04.02.
B.
Enterprise Fund. For Enterprise Fund investments:
(1)
TEDCO may not acquire an ownership interest in a business that exceeds 25 percent of the business; and
(2)
Within 15 years of making the investment, TEDCO shall divest itself of the investment.
Chapter annotations
Authority: Economic Development Article, §§10-409 and 10-4A-27, Annotated Code of Maryland
History: Effective date: December 30, 2019 (46:26 Md. R. 1167)
History: Regulation .03B amended effective September 18, 2023 (50:18 Md. R. 800)
History: Regulation .05 amended effective February 21, 2022 (49:4 Md. R. 302)
History: Regulation .05B amended effective February 22, 2021 (48:4 Md. R. 178)
History: Regulation .05C repealed effective September 18, 2023 (50:18 Md. R. 800)
History: Regulation .07C amended effective February 21, 2022 (49:4 Md. R. 302)