Apply now for TEDCO Seed Funds (US)

Deadline: Ongoing

TEDCO’s Seed Funds are invested in companies that show promise of becoming venture fundable companies or are companies that, through a seed investment, will be sustainable through customer revenue, follow-on funding, or other forms of corporate venture.

TEDCO is pleased to be one of the direct participants in the deployment of Maryland’s State Small Business Credit Initiative (SSBCI). This money will support TEDCO’s Seed Funds, which are invested in companies that show promise of becoming venture fundable companies or are companies that, through a seed investment, will be sustainable through customer revenue, follow-on funding, or other forms of corporate venture.

What

The Seed Funds are a family of four funds each investing in early-stage technology companies. Investments are made through convertible debt and equity instruments with check sizes ranging from $100K to $500K.

Cybersecurity Investment Fund – Invests in cybersecurity and information technology companies
Life Sciences Investment Fund – Invests in companies with an FDA pathway
Technology Commercialization Fund – Invests broadly in early-stage technology companies
Gap Investment Fund – Invests broadly in early-stage technology companies – requires matching funds

Who

TEDCO welcomes early-stage technology start-ups from all industries to apply. However, to be applicable, a company must meet all of the following qualifications:

Principal place of business is in Maryland
At least one full-time employee

Requirements

TEDCO is an instrumentality of the State of Maryland and uses taxpayer dollars to fuel its investment programs. These programs are subject to Maryland laws and there are some basic legal requirements for all investment programs as well as additional requirements for specific investment programs. The statute and regulations can be found here: (TEDCO Statute; Invest Maryland Program Statute; and COMAR).
Early-stage, technology-based companies
- Early-Stage
  - For companies applying for their first investment from Seed, all companies must have started operations within five years from the date of the application and investment. Companies applying to the Builder Fund are not subject to the five-year limitation. Also, an applicant cannot have received over $15,000,000 in funding (not including funding from TEDCO or grants) to be considered early-stage. If your company employs more than 250 employees, it is not eligible. Some of these requirements do not apply to follow-on funding from TEDCO.
- Technology-Based
  - How does TEDCO define “technology-based”? For TEDCO, a technology company is one that applies science for practical purposes and includes products and processes that are or will be protectable as intellectual property. Your company must rely on the technology to provide a competitive advantage in the market.
Maryland-based companies
- TEDCO must determine that your company is a Maryland-based company (called a “qualified business” under Maryland law). To be considered a Maryland-based company, it must meet the requirements below.
  - More than half the workforce must work from a physical location in Maryland. In calculating whether your company meets this requirement, please count all W-2 employees (full time and part-time) and founders active in the business of the company.
  - Headquarters in Maryland. Your company’s principal business operations must be conducted from a physical location in Maryland. This location is the headquarters from which your company’s officers run the business.
Commitment to Maryland. TEDCO invests in companies that are committed to Maryland and intend to stay. Your company will need to be willing to sign a five-year agreement commonly called a claw back. The basic concept of a claw back is to allow TEDCO to divest itself of a company that no longer meets the requirements of a Maryland-based business.
Types of Maryland-based Companies that Cannot Receive TEDCO Investment
- In general, TEDCO cannot invest in the following types of companies:
  - Sole proprietorships (your company must be formed as an entity such as a corporation or limited liability company)
  - Companies with more than 250 employees
- And, TEDCO cannot invest in companies primarily engaged in:
  - Retail sales
  - Real estate development
  - Insurance, banking or lending
  - Professional accounting, law or medical services
In rare circumstances, TEDCO will be able to invest in a company that does not meet the requirements of a Maryland-based business, if the company is likely to provide substantial economic impact to Maryland in terms of job growth, capital investment and contributions to Maryland’s ecosystem.