NC
Biotechnology Center Creates New Loan Program
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 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 and 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
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 and Technology Development Program.