SubscribeFirms may get up to $250K in one-time matching loans
The North Carolina Biotechnology Center has launched a program to match Biotechnology Center loans of up to $250,000 with “angel network” or venture capital investments to help bootstrap biotechnology companies in the state.
The Strategic Growth Award (SGA) loan program offers a new option to start-up companies facing the cash crunch that sometimes hits between early-stage seed funding and later investment from venture capitalists, business partners and shareholders.
The North Carolina Biotechnology Center has provided loans to new biotechnology ventures for more than 20 years, primarily targeting start-up company research. But the SGA loan isn’t restricted to research funding. Rather, these funds can also be used for hiring key non-executive employees, helping to secure patent rights, pursuing business development and licensing opportunities and other purposes that don’t include brick-and-mortar outlays.
“We see a growing need for this kind of ‘bridge’ money,” said Ken Tindall, the Biotechnology Center’s Senior Vice President, Science & Business Development. “This new SGA loan is the latest example of the North Carolina Biotechnology Center responding to help meet the critical financing needs of early-stage biotechnology companies.”
SGA loans must be matched by an equal investment or loan from an angel network or venture capital fund. The SGA money can’t be used for physical facilities or to compensate corporate executive officers, though these restrictions don’t extend to the matching investments.
The SGA program is open only to North Carolina-based biotechnology companies – those involved in life sciences, natural products or agriculture and in veterinary, environmental or industrial endeavors. Qualifying companies must show that the loan and matching investment would lift the company to new commercial milestones likely to woo follow-on investors, said John Richert, Vice President of the Biotechnology
Center’s Business & Technology Development Program.
“Once an applicant has passed both Biotechnology Center and the other investors’ due diligence,” he said, “we’re able to give this North Carolina biotechnology company a loan at favorable terms.” Recipients of the SGA funds must provide the Biotechnology Center with progress updates on their use of the money.
The Biotechnology Center, headquartered in Research Triangle Park, is a private, non-profit corporation supported by the N.C. General Assembly. Its mission is to provide long-term economic and societal benefits to North Carolina by supporting biotechnology research, business and education statewide.
As part of that mission, the Biotechnology Center has established four regional offices during the past two years, and plans a fifth later this year to serve the greater Charlotte area. The Eastern Regional Office in Greenville and the Southeastern Regional Office in Wilmington are the most recently opened sites. The Piedmont Triad Regional Office is in Winston-Salem and the Western Regional Office is in Asheville.
North Carolina is the nation’s No. 3 state for biotechnology, based on number of companies, according to Ernst & Young’s 2005 report on the industry.
Contact: Jim Shamp, News & Publications Editor, North Carolina Biotechnology Center, 001 919 541 9366 or jim_shamp@ncbiotech.org. Visit the Biotechnology Center’s Web site at www.ncbiotech.org.
RESEARCH TRIANGLE PARK, N.C., Jan. 18, 2006