# COMAR Title 14 — Independent Agencies

## Subtitle 04 — Maryland Technology Development Corporation

### Chapter 06 — Maryland Venture Fund

**Authority:** Economic Development Article, §§10-409 and 10-4A-27, Annotated Code of Maryland

**Administrative History:** Effective date: December 30, 2019 (46:26 Md. R. 1167)

**Administrative History:** Regulation .03B amended effective September 18, 2023 (50:18 Md. R. 800)

**Administrative History:** Regulation .05 amended effective February 21, 2022 (49:4 Md. R. 302)

**Administrative History:** Regulation .05B amended effective February 22, 2021 (48:4 Md. R. 178)

**Administrative History:** Regulation .05C repealed effective September 18, 2023 (50:18 Md. R. 800)

**Administrative History:** Regulation .07C amended effective February 21, 2022 (49:4 Md. R. 302)

#### Regulation .01 Purpose.

*COMAR 14.04.06.01*

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.

*COMAR 14.04.06.02*

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.

*COMAR 14.04.06.03*

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.

*COMAR 14.04.06.04*

TEDCO seeks to invest in businesses that have demonstrated financial success and continued growth potential appropriate for subsequent venture investments.

#### Regulation .05 Eligibility.

*COMAR 14.04.06.05*

TEDCO shall be satisfied that the applicant meets the requirements under COMAR 14.04.02.04.

#### Regulation .06 Investment Criteria.

*COMAR 14.04.06.06*

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.

*COMAR 14.04.06.07*

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.