Four Maryland Technology Development Corporation funds will begin accepting applications for investments again after they had delayed investments while adapting regulations to an oversight law passed by the Maryland General Assembly last year.
The Builder Fund, the Maryland Venture Fund, the Rural Business Innovation Initiative and the Seed Fund are now accepting applications for investment.
“We are thrilled to bring these application portals live after the team has worked hard to finalize the regulations,” Stephen Auvil, TEDCO’s executive vice president, said in a statement. “It’s our goal to get back to what TEDCO does best, and that’s building great, Maryland-based startups and continuing to grow innovation and entrepreneurship in the state.”
A legislative audit issued last February found issues that included how TEDCO directed funding to companies that were not primarily based in Maryland and invested in companies that had associations with the Maryland Venture Fund’s advisory committee.
In the aftermath of the audit, lawmakers put more restrictions in place to govern how TEDCO invests its money and what oversights are in place to govern the agency.
One of the lawmakers’ requirements was that TEDCO develop an application process for its investment programs. That application process is now ready, TEDCO said Friday.
The Builder Fund is designed to help startups founded by people from economically disadvantaged background. The Rural Business Innovation Initiative invests in companies from rural Maryland. The Maryland Venture Fund is a venture capital fund focused on growth stage companies, and the Seed Fund invests in seed-stage companies.
TEDCO explained to lawmakers last month how it had crafted its regulations to comply with the oversight law.
The new regulations more clearly define what a Maryland business is and how it can qualify for investments. They also define how a company not defined as a Maryland business can receive investment — if it will have a “substantial” economic impact on the state.
Under the new regulations, state businesses must have their principal base of operations in Maryland; have more than half of their workforce in Maryland; and intend to maintain their base of operations in Maryland.
TEDCO also has created provisions that would allow it to claw back its investment if a company leaves the state.
While TEDCO is accepting applications now, investments could still take a little while to happen. The agency’s Maryland Venture Fund Authority does not yet have a quorum of members appointed to disburse funds.
The Maryland Venture Fund will also only be accepting applications from current Maryland Venture Fund portfolio companies. It anticipates accepting applications from other companies for the fund later this spring.
TEDCO operates eight funds. Programs like the Maryland Innovation Initiative, which helps commercialize university technology, and the Maryland Stem Cell Research Fund were not affected by the new regulations.