EDA’s average historical commitment is $2.6 million since program inception. Qualifying commitments may be up to $10 Million, or 10% of the total fund size.
Investment in early-stage technology and life science companies with revenues, generally, less than $3 million
Investment capital for approved partners
Build strategic relationships in the technology and life sciences community
Support growth and job creation for NJ companies
See venture fund policy and investment guidelines below
Application submission required for consideration
EDA VENTURE FUND INVESTMENT ACTIVITY:
To date, EDA has committed over $40 million to more than a dozen venture capital funds since 1999. Cumulatively, these partner funds invested approximately 6x the EDA’s investment into more than 60 New Jersey early-stage technology and life science companies. Including other third party investors, companies in the EDA venture fund portfolio have received approximately $2 billion of funding and employed almost 2,000 full time employees as of December 31, 2015.
Current and historic venture fund partners include:
1. Quality of leadership
As necessitated by the long-term investment horizon of venture capital, EDA seeks to maintain active investment partnerships deploying capital across market cycles. As part of the Edison Innovation Fund, EDA has implemented guidelines to ensure that its venture capital investments consistently support the success of emerging technology companies in New Jersey. These guidelines set forth a strategy for staff to review and assess qualifications for venture capital fund commitments in a consistent and equitable manner.
Venture fund managers seeking EDA investment will apply through the online application. Applications will be assessed and scored using the guidelines outlined below:
: Consideration is given to senior leadership’s length of experience together as an institutional fund manager and investor, as well as, the relevance of experience to the targeted strategy.
2. Depth of Resource
: Consideration is given to the size and experience of additional team, as well as, the current staffing processes used in order to effectuate the strategy. Succession / continuity planning is considered.
3. NJEDA Partnering
: The prospective manager is assessed on its ability and willingness to serve as a strategic partner to EDA, support the Technology & Life Sciences ecosystem in New Jersey and locate in the State.
: The prospective manager is assessed on its ability to source and track relevant and non-traditional deal flow to maintain an advantage in effectuating the stated strategy, with particular emphasis on New Jersey.
5. Strategic Focus
: In order to align with EDA objectives, the target fund should be focused on early-stage companies with less than $3 million in trailing twelve month revenue prior to investment, diversified across technologies.
6. Geographic Focus
: The investment offering will be assessed according to the percentage of the total fund identified for investment in New Jersey and to the breadth of exposure within the State. Consideration may be given to funds with a regional or national approach, emphasizing investment in NJ.
7. Consistency of Strategy
: The manager’s history and degree of past success executing the targeted fund strategy is indicative of its understanding and ability to mitigate associated risks, particularly in an institutional fund structure.
8. Performance History
: Investment returns on individual funds are reviewed on an absolute basis and relative to peers. Returns across prior funds should be consistent. Volatility of returns within funds should be tolerable relative to the broader asset class. Consideration will be given to first time institutional managers based on individual principal track records.
9. History Investing in New Jersey:
The amount invested to date in New Jersey by the manager on an absolute basis and relative to peers will be considered in conjunction with the investment return on New Jersey -based companies and the ability to create jobs in the State.
10. Fees and Expenses:
The manager must represent a budget for the target fund and General Partner. Fees and expenses will be compared to peers and should be sufficient only to effectuate the stated strategy of the investment offering under consideration.
11. Incentive and Alignment:
Carry (performance incentive) as a percent of profit sharing between the LP and GP should be comparable to peers and properly aligned for the relative risk and reward of the targeted strategy. Within the firm, carry ownership should be equitably spread among the team with consideration for contribution to the success of strategy. The General Partner commitment should be personally meaningful and significant relative to the total fund size.
Governance terms should sufficiently protect Limited Partners. EDA requires a seat on the Limited Partner advisory board for all investments in excess of $1,000,000.
13. Fundraising Status:
Stage of fundraising will be considered with respect to the manager’s ability to effectuate the strategy. Participation by other institutional Limited Partner’s in the fund offers an additional validation signal to EDA and helps effectuate the value-add.
At all times, the potential for a limited partnership investment from EDA, is subject to the available resources for a 10-15 year fund life.
Fund Manager Application
EDA Venture Fund Policy
Sample Requested Documents
Sample Due Diligence Questionnaire
Venture Fund Investment Program Brochure
APPLICATION & POLICY: