Business First: ECIDA to offer venture capital funds
ECIDA to offer venture capital funds
Mar 25, 2015, 3:01pm EDT
by James Fink
Buffalo Business First Reporter- Buffalo Business First
In an effort to provide gap financing for start-up companies, the Erie County Industrial Development Agency is once again entering the venture capital landscape.
The agency's directors agreed to allocate $1 million to assist qualified emerging businesses.
And, they are doing this realizing it can be a financially risky proposition.
"You have to be patient," said Steve Weathers, ECIDA president and CEO.
This is not the first time the agency has provided venture capital dollars. The ECIDA first entered the venture capital picture in 1996 and for more than 15 years provided some gap financing. Of the 37 VC deals it was involved with, only two succeeded, once of which was Synacor Inc.
Any loans will be vetted not only by agency staff but an outside committee of legal and financial experts. The committee began meeting last spring to work out the details of the program.
Among the mandates, any company must be located in Erie County.
Weathers said the ECIDA's role will be secondary to other venture capital funds or financial institutions.
"We will not be the sole investors," Weathers said. "We will be co-investors and likely, a small investor."
Weathers said 10 parties have already approached the agency seeking VC funds. Of that, five remain in the pipeline. All are being reviewed, but no timetable has been set for when, or if, the funding request will be presented to thge agency's board of directors.
If the program is successful, the ECIDA will add another $1 million to its VC financial pool in each of the next four years, but it will be a year-by-year decision whether the allocate the funds.
"If a right deal doesn't present itself, then we won't do it," Weathers said. "We won't be making the investments just for the sake of making investments."
James Fink covers real estate, commercial development and government