Technology Commercialization: Russian Challenges, American Lessons (1998)
Chapter: Appendix G: Innovation Research Fund
Appendix G
Innovation Research Fund
The Innovation Research Fund (the "IRF") is a revolving venture capital program of the North Carolina Technological Development Authority, Inc. (the "TDA"). The IRF provides flexible financing to emerging innovation-oriented business in North Carolina. Since its formation in 1984, the IRF has provided venture capital to about 70 companies ranging from agriculture and biotechnology to computer software.
Typical IRF investments range from $50,000 to $250,000 per company. Financing, usually in the form of equity, is provided to companies with high-growth, job-creation potential. Funds are normally stage into the business, based upon company needs and performance milestones. The IRF prefers to invest with other firms. However, in some cases, the Innovation Research Fund may lead the investment process.
In addition to funding, the IRF provides assistance to its portfolio companies through active participation in the company's direction. While the IRF does not become directly involved in the day-to-day management of portfolio companies, the Fund can help portfolio companies find corporate partners, new employees, and sources of additional funding. These services are designed to help the company meet its operating goals, and to allow the Fund to monitor the company's progress.
The IRF investment approach is to focus on early-stage, high-growth businesses where there is an opportunity for significant long-term capital appreciation and job creation in North Carolina. The IRF concentrates on proposals with outstanding management teams and high-quality products in expanding markets. Investments are made throughout North Carolina, in many industries and in any product or serve that promises an annualized return exceeding 50 percent.
New investment opportunities are reviewed on a continuous basis. In order to be considered for funding, entrepreneurs should present a complete business plan which includes:
- Background of management team
- Description of product or service
- Market opportunity and direction
- Competitive analysis
- Current financial statements
- Financial plan with projected growth through the next five years
- Amount of funding requested
- Use-of-funds description
Companies seeking funding are advised to start the process several months before funds are needed. The IRF will evaluate the strength of the business and if, deciding to pursue the opportunity, will perform due diligence and meet with management to reach an investment agreement.
Source: North Carolina Technological Development Authority, Inc.
