DCED: Venture Capital Investments Support New Companies, Job Growth

News provided by

Pennsylvania Department of Community & Economic Development

Jul 05, 2012, 11:23 ET

HARRISBURG, Pa., July 5, 2012 /PRNewswire-USNewswire/ -- The Commonwealth Financing Authority (CFA), through the New Pennsylvania Venture Capital Investment Program, has approved $5.5 million investment to help two early-stage companies grow and create jobs in Pennsylvania.

"Governor Corbett is committed to providing entrepreneurs and new companies with the start-up capital needed to grow their businesses and produce jobs," said Department of Community and Economic Development Secretary C. Alan Walker. "Today's investments will provide early-stage technology companies with the venture capital and equity financing they need to jump-start their businesses and create new jobs."

The New PA Venture Capital Investment Program generates significant private equity investment by requiring the venture capital firm to provide a match of three dollars into Pennsylvania companies for every one dollar in state funding. With this investment, the CFA has now committed $50.4 million of the $60 million available to venture capital partnerships for investment in Pennsylvania-based technology-oriented entities.

The CFA will make a $4 million investment in Draper Triangle Partners III LLC (DTV III), a $100 million fund. DTV III will make 15 to 20 investments with an average target of $500,000 to $2.5 million per investment – approximately $50 million of these investments will be in Pennsylvania. Through this relationship, the CFA investment will result in an additional $46 million of private venture capital investments for Pennsylvania companies; far in excess of the three-to-one required match.

Draper Triangle Partners III is a Pittsburgh-based limited partnership being organized with the objective of achieving significant capital appreciation through a portfolio of equity and equity-related investments in companies typically located in western and central Pennsylvania. The fund will seek to invest in seed and early-stage emerging technology companies.

The CFA also approved a $1.5 million investment in NextStage Capital II LP (NextStage II), a $25 million fund. NextStage II will make 15 to 21 investments with an average target of $500,000 to $2 million per investment. Through this relationship, the CFA investment will result in an additional $15 million of private venture capital investments for Pennsylvania companies.

Based in Audubon, Montgomery County, NextStage II is an early-stage venture capital fund being organized with the objective of investing entirely in seed and early-stage software and technology-enabled services (software as a service) stage companies. The fund will focus on investments in the state's northern and central regions, and in Philadelphia.

The New PA Venture Capital Investment Program is a catalyst to increase the availability of venture capital investment in Pennsylvania early stage and "seed" companies. The program is administered by the Department of Community and Economic Development, under the direction of the CFA.

For more information about the New PA Venture Capital Investment Program, or other community and economic development initiatives, visit www.newPA.com or call 1-866-466-3972.

Media contact: Theresa Elliott, 717-783-1132

SOURCE Pennsylvania Department of Community & Economic Development