Supports Christie Administration’s Focus on Growing State’s Technology Industry
TRENTON, N.J. (March 15, 2011) – New Jersey continued its efforts to support the growth of the state’s technology industry with the approval today of two new venture fund investments. 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.
“Venture capital offers promising young companies an infusion of cash to help bring products to market or expand product lines,” said EDA Chief Executive Officer Caren S. Franzini. “These investments are designed to attract and develop technology businesses and support job growth in New Jersey.”
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 today’s 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.
Franzini noted that in addition to supporting New Jersey businesses, the new investments also will help to strengthen the state’s venture capital network. Both Osage and NextStage have committed to opening new offices in New Jersey.
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. The fund will target enterprise technology companies, including providers of general business software, cloud computing, healthcare information and infrastructure management software. Osage plans to establish a new office in Branchburg to manage the fund.
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. NextStage also expects to lease space in the Rutgers-Camden Business Incubator at the EDA’s Waterfront Technology Center at Camden. As a result, NextStage will actively pursue investments in southern New Jersey. The fund will focus on early stage, business-to-business, information technology companies, including providers of internet media, communication software, security software and IT infrastructure technology.
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.
These investments follow the EDA Board’s January authorization of a $2 million investment in New Jersey-based Edison Venture Fund VII, which targets financial, healthcare information, interactive marketing and enterprise 2.0 technology companies. The fund, which has obtained nearly $206 million in committed capital to date, is seeking to invest in 25 to 30 expansion stage companies with a $300 million target size for the fund.
The Christie Administration has demonstrated an unprecedented commitment to growing business in New Jersey. The EDA is part of the state’s results-driven Partnership for Action. Created by Governor Chris Christie and led by Lieutenant Governor Kim Guadagno, the Partnership is the hub for all economic development activity in New Jersey. It is comprised of three interconnected and highly focused organizational elements, which include Choose New Jersey, Business Action Center, and EDA. The Partnership’s goals include attracting new business, and helping existing businesses thrive, in New Jersey by focusing on relationship building and person to person outreach, promoting the state’s incentives and resources, developing pro-growth policies, and assisting businesses in navigating state government and programs.
To learn more about opportunities for business growth throughout New Jersey, visit the state’s business portal at http://www.NewJerseyBusiness.gov.
Erin B. Gold, NJEDA