Ben Franklin Technology Partners Create Funding Vehicle to Aid Growth of Companies

Ben Franklin Technology Partners of Southeastern Pennsylvania (BFTP/SEP), an independent nonprofit economic development organization, has announced the Commonwealth of Pennsylvania’s $2 million commitment to establish the Ben Franklin Investment Partners venture guarantee revolving fund. The fund is the first such development financing vehicle of its kind in the U.S.

The multifaceted fund provides a guarantee of up to 25 percent of any loss experienced by a group of qualified private investors – angels – in seed investments made in technology companies located in southeastern Pennsylvania. The goal is to respond to the capital needs of these early-stage companies, most of which have experienced difficulties raising early stage risk financing and other challenges as a result of the economy’s downturn.

Over time, the Ben Franklin Investment Partners guarantee fund is expected to leverage up to $10 million of seed-stage investments from angel investors along with approximately $8 million of companion BFTP/SEP investments. Both BFTP/SEP and non-BFTP/SEP enterprises will have access to financing rounds, which are expected to average $350,000 to $750,000.

With a maximum guarantee of $200,000, the fund both encourages private investors to take a longer view of investment opportunities in southeast Pennsylvania as well as partner with the BFTP/SEP and the Commonwealth to grow new enterprises. Targeted companies will reflect the diversity of the southeast region, including communications, business services, information technologies, electronics, life sciences, medical devices and services, and advanced manufacturing industries.

More information on BFTP/SEP is available at: http://www.sep.benfranklin.org/

Copyright State Science & Technology Institute 2003. Information in this issue of SSTI Weekly Digest was prepared under a cooperative agreement with the U.S. Department of Commerce, Economic Development Administration. Redistribution to all others interested in tech-based economic development is strongly encouraged — please cite the State Science & Technology Institute whenever portions are reproduced or redirected. Any opinions expressed in the Digest do not necessarily reflect the official position of the U.S. Department of Commerce.