EDA approves investment firms to manage funds to support small and early-stage businesses

The New Jersey Economic Development Authority announced it has selected six firms to help manage and deploy capital for three unique investment strategies funded through the federal State Small Business Credit Initiative: the Blended Capital Fund, Life Science/Health Care Fund and Socially & Economically Disadvantaged Individuals Seed Fund.

The fund managers will be responsible for raising, or contribute to the raising of, private capital, managing the fund’s day-to-day operations and developing and maintaining a pipeline of prospective, New Jersey-based small businesses that can benefit from the fund.

In December, the U.S. Department of Treasury approved New Jersey’s SSBCI application and awarded the EDA $255 million to create programs that will provide financial and technical assistance to small and microbusinesses, and early-stage, innovation-focused companies located across the state. SSBCI is a federal program designed to catalyze lending and investment of private capital into small businesses, particularly those that would not otherwise have access to funding.

Here is a look at the funds, their aim — and who will help manage them:

Blended Capital Fund

Funded at $50 million, the Blended Capital Fund will co-invest SSBCI funds in an investment vehicle that supports the purchase of eligible loans from Community Development Financial Institutions and Minority Depository Institutions serving New Jersey, allowing them to do more lending.

The fund will be managed by Calvert Impact, which will leverage and utilize the investment by the EDA in the Blended Capital Fund to create and administer a New Jersey Loan Participation program to support New Jersey-based small businesses with working capital loans.

Life Science/Health Care Fund

A portion of the $60 million Life Science/Health Care Fund will be managed by three firms and support early-stage New Jersey life science and health care businesses, including companies in biotechnology, pharmaceuticals and medical devices.

Of $60 million, $12.5 million will be managed by New York City-based Signet Healthcare Management LLC, which was founded in 1998. Another $7.5 million will be managed by Tech Council Ventures LLC, which is based in Summit. And $5 million will be managed by Syridex Bio LLC, which is headquartered in Princeton.

SEDI Seed Fund

The $20 million SEDI Seed Fund will be managed by Include Venture Partners LLC and Gener8tor Management LLC. The firms will support seed and early-stage startups substantially located in New Jersey with SEDI owners. For purposes of the fund, the basis for eligibility can be geographic, demographic, or socioeconomic.

Include Venture Partners will manage up to $15 million. The firm is focused on investing in diverse-led undervalued, outperforming funds and founders, with a focus on ESG and Sustainability. Gener8tor Management will manage up to $5 million of the fund. Since Gener8tor’s inception in 2012, the firm has expanded its startup and small business venture funds and accelerators across 41 cities, 20 states and two countries. Due to the firm’s substantial international resources, it is able to identify target opportunities, provide meaningful support to its portfolio companies and administer funds with a high degree of acumen.

The funds that are not based in New Jersey will set up an office here, creating a number of high-paying jobs.

EDA CEO Tim Sullivan said the funds have a huge potential for impact.

“Together, these three funds will help position New Jersey businesses for long-term growth and success,” he said. “Gov. (Phil) Murphy’s economic development strategy has been centered on connecting entrepreneurs and small business owners with the capital they need to succeed in an equitable and inclusive manner.”

Murphy said the announcement is another step in his efforts to help small business.

“Since the pandemic, my administration has been working to ensure small business owners have the capital to grow their businesses and achieve success,” he said. “The federal funding awarded to New Jersey will help support small and early-stage businesses across the state and propel our economy forward.”