HARRISBURG: On behalf of Governor Edward G. Rendell, Community and Economic Development Secretary Dennis Yablonsky today announced the first “angel guarantee” through the Ben Franklin Investment Partners (BFIP) program.
Under the program, investments made by high net worth early-stage investors – often called “angel investors” – are guaranteed up to 25 percent of the loss of an angel's initial investment in a qualifying Pennsylvania company.
BFIP's $62,500 guarantee on the investment in Aereon Solutions, Inc., a New Jersey-based company slated to relocate from Princeton, New Jersey to the Greater Philadelphia region, will support up to $250,000 of angel investments and bring 12 new high-paying jobs to Pennsylvania. Aereon Solutions provides field service automation platforms for equipment and site-based service businesses.
Aereon Solutions, whose guarantee also is augmented by an approved $250,000 direct company investment from Ben Franklin Technology Partners of Southeastern Pennsylvania (BFTP/SEP), is completing a $1.7 million dollar financing round that included its management team, Intel Capital Corp., Robin Hood Ventures, Tri-State Private Investors Network, and New York Angels. The Aereon deal was sourced for consideration by Robin Hood Ventures, a Pennsylvania-based angel investor group, as well as by a group of angel investors from the Loosely Organized Retired Executives (LORE).
“The BFIP program is the first angel investor guarantee program of its kind in the nation,” said Yablonsky. “It represents an innovative investment mechanism created specifically to address the seed stage funding gap. Not only does the guarantee minimize the angel investors' potential downside loss, it provides Pennsylvania start-up companies with additional capital for growth.”
The BFIP program, which was launched in December 2002 with a $2 million commitment from the Commonwealth, is managed by BFTP/SEP, part of a statewide network funded by the Ben Franklin Technology Development Authority (BFTDA). The BFTDA is dedicated to fostering technology innovation and strengthening the state's economy.
The BFIP program is an economic development financing tool designed to promote increased investment by accredited private investors – angel investors – in early stage technology companies located in southeastern Pennsylvania. The BFIP is a venture guarantee financing vehicle that provides a guarantee up to 25 percent of the loss of an angel's investment in a qualifying company. In exchange, the BFIP will receive a guarantee fee of 1.5 percent per annum of the guaranteed amount, plus an option to purchase, at the angel's cost, up to 15 percent of the investment.
Over time, it is anticipated that the BFIP vehicle will leverage $8-$10 million investments from angels in addition to $6-$8 million in BFTP/SEP investments.
“The Aereon Solutions deal is indicative of the synergy that occurs when distinct entities share a common goal. It supports Aereon Solutions' relocation to southeastern Pennsylvania , facilitates more than a dozen new jobs in the Commonwealth, and exemplifies the willingness of multi-state partners in Pennsylvania, New Jersey and New York to seal the deal,” said RoseAnn B. Rosenthal, president and CEO of BFTP/SEP.
Yablonsky noted that in addition to the BFIP program, the Commonwealth recently enacted two innovative venture capital programs – The New Pennsylvania Venture Guarantee Program and The New PA Venture Capital Investment Program – which are key components to Gov. Rendell's Economic Stimulus Package. |
