The New Jersey Economic Development Authority took two actions during its Dec. 21 meeting that will help fuel the next stages of the New Jersey Innovation Evergreen Fund.
The board approved eight corporations to purchase $50 million in tax credits for the NJIEF, a tool that was established by the New Jersey Economic Recovery Act of 2020 to increase access to strategic resources and venture capital into the Garden State.
And the board announced that it is accepting applications from investment firms to be considered Qualified Venture Firms, which would certify them for participation in the program.
The steps mark a milestone for the NJIEF. As part of the program, the state will become an equity investor in startups deploying up to $600 million into companies beside venture capital groups.
During JumpStart New Jersey’s Meet the Angels event, early-stage companies networked with the organization’s investors as a way to provide informal feedback and coaching. Click here to read more.
The announcement follows the inaugural New Jersey Corporate Business Tax Credit Auction to raise funds to support the NJIEF. The pilot initially offered $30 million in tax credits but was raised to $50 million because of high demand.
The approved corporations are:
The capital raised from the tax credit sales is estimated to initially fund investments in six to 10 businesses next year.
Gov. Phil Murphy said the investment will not only support Garden State entrepreneurs, but will also ensure that more companies, start, grow, and stay in the state. “Those highly successful companies that have built their reputations here now have an opportunity to support the next generation of great businesses that will carry New Jersey into the future,” the governor said. “It also shows residents our commitment to making the state work for everyone with another innovative program aimed at expanding capital opportunities.”
Tim Sullivan, NJEDA chief executive officer, said the goal is to create public-private partnerships to drive economic growth and spur job creation. “Investors and entrepreneurs alike have hailed the novel NJIEF as a powerful tool that will catalyze investment into New Jersey startups and now we know that the corporate sector sees the enormous value in the Fund as well,” Sullivan said. “In 2022, we set the foundation for what promises to be exciting years ahead for the NJIEF and the innovation community as we begin to see investment dollars flowing into startups through the Garden State.”
In addition to the financial investment, the applicants also submitted plans to support the state’s innovation economy, along with a commitment to serve on the NJIEF advisory board for one year. That support will include contributions to support external mentorship programs; free shared workspace open to high-growth startups; long-term commitments of education and training to support the future of STEM students from underserved New Jersey school districts; and forums to bring together world-class investors, enterprises and early-stage startups together here in the Garden State.
“The NJIEF gives the Authority another unique tool to help support start-up companies with a comprehensive approach that goes beyond just funding,” said NJEDA Chief Economic Transformation Officer Kathleen Coviello. “With concerns over economic downturns and the increased costs of borrowing, having access to capital is more important than ever. The timing of this fund is critical for New Jersey companies to prosper and grow. We believe NJIEF will set itself apart with our business connections and mentorship opportunities as the business leaders of today help shape the leaders of tomorrow.”
Additional details on the NJIEF can be found here.