TRENTON, N.J. (February 9, 2023) – The New Jersey Economic Development Authority (NJEDA) today issued Notices of Investment Opportunities (NIOs) seeking experienced investment managers to manage and deploy investment capital for unique fund opportunities. Combined, there is $150 million of capital for the selected managers to support investment in New Jersey through four funds. The NIOs can be found at https://www.njeda.com/notices-of-investment-opportunity/.
The Authority plans to use $130 million it will receive from the U.S. Department of Treasury’s State Small Business Credit Initiative (SSBCI) to anchor three of the funds. A fourth fund – the Black and Latino Seed Fund – will be capitalized with up to $20 million from New Jersey’s 2022 and 2023 Fiscal Year budgets and is a key element of Governor Phil Murphy’s plan to create the most diverse and inclusive innovation economy in the nation.
The NJEDA issued the NIOs for the following four unique investment strategies:
- Socially & Economically Disadvantaged Individuals (SEDI) Seed Fund – The SEDI Seed Fund is a $20 million limited partner investment that will focus on investing in one or more venture funds to 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.
- Black and Latino Seed Fund – Governor Murphy and the New Jersey Legislature have committed up to $20 million to form a New Jersey specific fund that will drive capital to innovative Black- and Latino-owned enterprises. The fund aims to address the nationwide investment crisis within the innovation economy by helping to close funding gaps that exist for far too many entrepreneurs of color. Crafted with input from Black and Latino founders, investors, and policy experts, this seed fund is an important step toward tearing down the institutional barriers that hold Black and Latino entrepreneurs back and replacing them with accessible resources that respond to these innovators’ unique needs.
- Blended Capital Fund – The $50 million Blended Capital Fund will co-invest SSBCI funds in an investment vehicle that supports the purchase of eligible loans from Community Development Financial Institutions (CDFIs) serving New Jersey, allowing them to do more lending.
- Life Science/Health Care Fund – This $60 million limited partner investment fund will invest in one or more venture funds to support early-stage New Jersey life science and health care businesses. The fund will consider investing in New Jersey companies in any or all of the following areas: pharmaceuticals, including branded, generic, and specialty; biotechnology; medical devices; regenerative medicine; microbiome; technology platforms geared to assist the medical community; digital health or health care software; diagnostics; biomedical technologies; nutraceuticals; cosmeceuticals; and others that dedicate their efforts to creating products to improve human or animal lives.
For each fund, the investment manager(s) will also be expected to raise, or contribute to the raising of, private capital, manage the fund’s day-to-day operations, and develop and maintain a pipeline of prospective, New Jersey-based small businesses that can benefit from the fund(s). Each NIO details additional responsibilities and qualifications for investment managers, as well as response deadlines. Each fund will be designed to provide members of the small business and innovation communities with access to resources to address their unique financing needs.
“Injecting capital into several high-wage, high growth sectors is one of the most critical elements of our ongoing efforts to strengthen New Jersey’s business environment and create opportunities for small business owners and entrepreneurs,” said NJEDA Chief Executive Officer Tim Sullivan. “Funding allocated by Governor Murphy and the New Jersey Legislature, as well as monies provided from the federal government, position us well to help finance growing businesses, attract new firms, and increase job opportunities.”
“New Jersey’s diversity is one of its greatest assets, and we have a moral obligation to ensure that that diversity is reflected in our business and innovation communities,” said Office of Diversity, Equity, Inclusion, and Belonging Director Jayne Johnson. “The investment managers selected through the NIOs announced today will be in a terrific position to help the NJEDA drive funding to small businesses and innovative, high-growth companies owned by diverse entrepreneurs throughout the state.”
In line with Governor Murphy’s vision for a stronger and fairer New Jersey economy, two of the four funds will be targeted to supporting the expansion of businesses owned by diverse or disadvantaged entrepreneurs.
“Under the Governor’s leadership, we are working to remove the systemic obstacles faced by far too many entrepreneurs of color and female founders seeking capital,” said NJEDA Chief Diversity and Inclusion Officer Michelle Bodden. “The unique investment strategies we plan to launch this year will strengthen our ability to address and offset the challenges diverse entrepreneurs and small business owners face as they grow their enterprises. It is particularly fitting that we are taking important steps during Black History Month toward launching the Black and Latino Seed Fund as we honor the contributions of the Black and Brown community in the innovation and venture capital space.”
“The NJEDA has a noteworthy history of committing millions of dollars into funds that have successfully fueled the growth of New Jersey small businesses and early-stage companies,” said NJEDA Chief Economic Transformation Officer Kathleen Coviello. “Now, leveraging the expertise of investment managers we select, we’ll be able to exponentially multiply the impact our dollars will have on businesses statewide, with a particular focus on supporting minority- and women-owned companies and businesses in strategic sectors.”