Silicon Valley and Silicon Alley and many states have tech startup accelerators and now N.J. wants one too.
The state’s new Edison Innovation Tech Accelerator Initiative will be funded by $450,000 over three years through the N.J. Economic Development Authority (EDA). It will be a “seed stage” investment fund that will aim to provide a competitive environment where tech focused entrepreneurs can showcase products, ideas and business acumen. The EDA will work with N.J. industry partners to identify a management team to administer the program via an Limited Liability Corporation (LLC) or other corporate entity.
Tech accelerators such as Tech Stars NYC and DreamIt Ventures allow entrepreneurs to develop their tech ideas and business skills while being mentored directly by savvy entrepreneurs who have already successfully built their businesses.
In N.J., the EDA would contribute equity into the venture with a return component. Members of the LLC will receive returns on the investments into the N.J. companies that participate in the program. The proposed EDA grant would involve a 50 percent private investment match capped at $150,000 for three years. A cap would be placed on administrative support for the program of 20% of overall funding. The rest of the funding will be used for equity.
Maxine Ballen of the New Jersey Technology Council thinks that the tech accelerator program will be good for the state. “I am very pleased to see additional programs launched to support New Jerseys technology companies. These kinds of initiatives reinforce the administration’s support for growing and maintaining our state’s vibrant technology industry.”
N.J. is asking interested parties to submit an overview of how the state’s model could be developed based on the following components
- Overall structure of the initiative, including overview of all partners and their role in the initiative. Overview should include partners’ experience and success in investing in early stage business models;
- Advocacy role of the EDA as a State partner in advancing the initiative;
- How this initiative will leverage private matching dollars;
- Ability of the partners to support businesses formed in New Jersey as well as attracting business ventures from other States;
- Ability of the partners to engage the technology service industry in providing mentorship opportunities.
Submissions of interest or a framework for ideas for the technology accelerator initiative should be sent to TechAccel@N.J.eda.com by September 15, 2011. For questions on the request for interest, contact EDA Director of Technology & Life Sciences Kathleen Coviello at (609) 858-6713.