Propel Baltimore Fund
The Propel Baltimore Fund makes investments of up to $250,000 in early-stage technology companies located in Baltimore City. The Fund will: address the critical need for more early-stage capital in Baltimore City, encourage more entrepreneurial activity in the City, create more high-paying jobs, and help to realize Baltimore City’s full potential as a destination for small and growing businesses.
The Propel Baltimore Fund (the “Fund”) was created through a partnership among the Maryland Technology Development Corporation (TEDCO), the Abell Foundation and the France-Merrick Foundation. The Fund, which has capital commitments of $4.3 million, will provide up to $250,000 as an angel investment in early-stage technology companies located in Baltimore City. The Fund intends to acquire investment interests in target portfolio companies within its first three years. Investments will be made in businesses for which an exit can be realized in four to seven years.
Start-up and early-stage technology companies with compelling new technology ideas or innovation-focused business plans may apply for investment from the Fund. Such companies that are located in, will be located in, or have a significant business presence in, Baltimore City, are eligible for investment. The Fund does not have any constraints regarding the type of technology businesses that it will consider for investment; however, its investments are limited to those that can achieve profitable exits in four to seven years. The Fund will seek companies which can favorably impress our due diligence team in the areas of:
- Size of business opportunity – where larger is better than smaller;
- Favorable competitive landscape – including significant product differentiators;
- Revenue and revenue growth rates – where larger and growing is better than smaller and stagnant;
- Customer counts and customer growth rates – including low customer attrition;
- Quality of executive team – including low employee attrition;
- Recognition by industry peers, customers or the media – for company potential and/or for company accomplishments;
- Other outside investment into the company from sophisticated angel, venture capital, private equity and/or strategic investors; and
- Potential for an exit event which will generate significant investment returns for the Fund in four to seven years.
The Fund distinguishes between two types of investments that it will make:
“First Round Investments” are investments in companies that have not previously received funding through one of TEDCO’s programs. First Round Investments will ideally be made in the form of convertible notes and will include a limit of $75,000 for the initial tranche of financing. With the approval of our Investment Committee, First Round Investments may be in a form other than convertible notes and may be in an amount up to $250,000.
“Second Round Investments” are investments in companies that have received prior funding through one of TEDCO’s programs – including a First Round Investment. Second Round Investments will generally be in the form of convertible notes, but may be made through other structures such as common stock, preferred stock, or limited liability corporation membership interests/units.
Generally, initial Second Round Investments will target the range of $50,000 to $100,000 for the initial tranche of financing with a total maximum investment of $250,000 per company.
The Fund will both “lead” investments and make investments as part of a syndicate of investors. In such cases where the Fund will be the lead investor, companies will be required to secure a matching investment of at least $0.50 for each $1.00 of investment by the Fund. Such matching investment must be from other sophisticated accredited investors.
Applicants apply on-line through TEDCO’s website (Application Form). Applications are accepted at any time and will be considered during a review cycle which is expected to range from eight weeks to sixteen weeks.