Friday, January 20, 2006

Biotech Center To Match VC Funding With Loans

Great idea, except the money can't be used for physical facilities...

Bootstrap biotechnology companies will have an easier time gaining traction thanks to a program launched by the North Carolina Biotechnology Center that will match venture capital investments with loans of up to $250,000. The Strategic Growth Award is designed to offer startup companies an additional avenue to help alleviate funding shortfalls that often occur between seed-funding stages and later venture capital investments, according to a written statement from the biotechnology center. SGA loans won't be restricted solely to research funding, say biotech center officials. The new loans can also be used for hiring employees, securing patent rights and pursuing business development and licensing opportunities. The loans, however, must be matched with an equal investment from a venture capital firm. While SGA loans cannot be used for physical facilities or to compensate corporate executives, these restrictions will not apply to the matching venture funds, officials say. The loan program is open only to North Carolina biotech companies involved in life sciences, natural products, agriculture, veterinary medicine or environmental endeavors. Triangle Business Journal reported in its Oct. 14, 2005 print edition that the Biotech Center was considering the loan program. The North Carolina Biotechnology Center is a private, nonprofit corporation headquartered near Research Triangle Park and supported by the North Carolina General Assembly. The organization operates four additional offices in Greenville, Wilmington, Winston-Salem and Asheville, with plans for a fifth office in Charlotte.

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