PHILADELPHIA, Dec. 17, 2002 (PRIMEZONE) -- Ben Franklin Technology Partners of Southeastern Pennsylvania (BFTP/SEP) today announced the Commonwealth of Pennsylvania's $2 million commitment to establish the Ben Franklin Investment Partners venture guarantee revolving fund. The fund is the first such development financing vehicle of its kind in the U.S.
The multifaceted fund provides a guarantee of up to 25% of any loss experienced by a group of qualified private investors -- angels -- in seed investments made in technology companies located in southeastern Pennsylvania. Its goal is to respond to the capital needs of these early stage companies -- most of which have experienced difficulties raising early stage risk financing, in addition to the many other challenges facing them as a result of the economy's downturn.
Over time, the Ben Franklin Investment Partners guarantee fund will leverage up to $10 million of seed-stage investments from angel investors along with approximately $8 million of companion BFTP/SEP investments. Both BFTP/SEP and non-BFTP/SEP enterprises will have access to financing rounds, which are expected to average $350,000 to $750,000.
With a maximum guarantee of $200,000, the Fund both encourages private investors to take a more protracted view of investment opportunities in southeast Pennsylvania as well as partner with the BFTP/SEP and the Commonwealth to grow new enterprises. Targeted companies will reflect the diversity of the southeast region and include communications, business services, information technologies, electronics, life sciences, medical devices and services, and advanced manufacturing industries.
The Ben Franklin Investment Partners fund represents another step in BFTP/SEP's long investment partner history: having managed the Pennsylvania Private Investors Group for several years; serving as the SBA's regional Ace-Net administrative portal; and co-investing with angels in 23% of its current deals.
"This new mechanism reinforces the community of angel networks that has been the critical source of risk capital. Historically, seed stage `angel' investors have provided a significant amount of risk capital in the U.S. marketplace. Like our namesake, the Ben Franklin Investment Partners fund recognizes that our communities are only as strong as the social infrastructures in which we invest and build upon. The core of this initiative underscores our commitment to do just that," noted RoseAnn B. Rosenthal, President & CEO of BFTP/SEP.
"The Ben Franklin Investment Partners fund represents an exciting development finance tool on numerous fronts. In addition to addressing seed stage funding gaps and encouraging angel network formation and investment activity, it also will attract adjacent, out-of-state angel investments to PA companies, and leverage public/private resources which build upon existing relationships," noted Peter Linder, Chairman of LORE, a Philadelphia area angel investment group.
About Ben Franklin Technology Partners of Southeastern Pennsylvania
An independent not-for-profit economic development organization, Ben Franklin Technology Partners of Southeastern Pennsylvania (BFTP/SEP) was established in 1982 to stimulate economic growth through innovation, entrepreneurship and the development and adoption of new technologies. BFTP/SEP, part of a statewide network supported by the Pennsylvania Department of Community and Economic Development, provides capital and expertise in technology, finance and business that helps entrepreneurs and established companies overcome challenges and plan for growth. Through our network of resources, the organization fosters dynamic relationships among companies, institutional and private investors, research institutions and the university community.
On the web: www.sep.benfranklin.org