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Venture Fund Investments Offer Tech Cos. Opportunities

TRENTON—The Board of the New Jersey Economic Development Authority (EDA) voted to invest $3 million in Osage Venture Partners III and $2 million in NextStage Capital II. The EDA’s limited partnership investments were funded with $5 million from New Jersey’s State Small Business Credit Initiative federal allocation, announced by Governor Chris Christie last October.

One of the ways the EDA helps increase available capital for emerging technology companies is by investing as a limited partner in venture capital firms that invest in New Jersey-based enterprises. Investments made by the EDA are expected to earn a reasonable rate of return, which is measured in financial terms and by job growth. Gains resulting from these investments are utilized to offer new funding opportunities to support New Jersey businesses.

Prior to this most recent action, EDA had approved investments in nine venture capital funds totaling $34 million. To date, the New Jersey technology businesses that have received investments from these funds have attracted more than $850 million in private capital.

Osage Venture Partners III, part of the Osage Ventures family of funds, was formed in May 2011 and will be a $60 to $90 million fund. The fund’s aim is to make a minimum of 15 investments in early stage technology companies, with a commitment to invest at least $9 million in New Jersey-based companies. These investments are expected to generate between 75 and 250 new jobs in the state.

NextStage Capital II is a newly created, $40 million fund that will be part of the NextStage Capital family of funds. The fund will seek to make 15 investments in early stage technology companies, with a minimum of $6 million committed to technology companies in New Jersey. These investments will create an estimated 120 new jobs.

The two venture funds were chosen through a competitive solicitation process that ran from November 16, 2011 through December 23, 2011. The solicitation required that the candidates have a focus on New Jersey and provide Series A investments in companies with less than $3 million in revenues and fewer than 500 employees.

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