Gov. Blagojevich Announces $450,000 Investment in Peoria based venture capital fund
Posted on July 31st, 2006
Fund Provides Critical Start-Up Capital to High-Growth Companies across Central Illinois
PEORIA – In his continuing efforts to provide critical capital to help promising young companies grow, Gov. Rod R. Blagojevich today announced a $450,000 investment in the Tri-County Venture Capital Fund, a Peoria-based seed stage fund to help bridge the gap between entrepreneurs and equity in Central Illinois. Jack Lavin, Director of the Illinois Department of Commerce and Economic Opportunity (DCEO), who is providing the funds, joined with local leaders today at The Heartland Partnership in Peoria to celebrate the announcement.
“Illinois and this region of the state are filled with new ideas and promising new technologies, but too often the lack early stage funding has been a barrier for growth. By investing in this Fund, which will invest in regional companies with high growth potential, we are helping to provide entrepreneurs with the tools they need to turn cutting-edge research into successful new companies. By creating a business environment that encourages innovation and addressing a critical shortage of this type of venture capital, promising firms are getting the resources they need to build their businesses and create high-paying, new jobs,” Gov. Blagojevich said.
The Tri-County Venture Capital Fund is a subsidiary of the Heartland Capital Network, a consortium of financing programs designed to meet the capital needs of business ventures in the greater Peoria region. The Fund was launched in July 2004, through an initial $2 million investment, as a result of efforts by several community leaders, including Glen Barton, retired President and CEO of Caterpillar Inc. and Doug Stewart, Regional Vice President of National City Bank. The Fund, which is managed by Jim McConoughey, President and CEO of The Heartland Partnership, offers investors the opportunity to pool capital and experience with a broader group of qualified investors. By enabling investors to pool capital, the Fund provides individual investors the opportunity to make smaller investments in a wider variety of private companies with extraordinary growth potential.
“We’ve had tremendous success in providing capital to local entrepreneurial ventures, enabling those companies to grow and prosper in Central Illinois,” says Glen Barton, Chairman, Tri-County Venture Capital Fund. "This $450,000 investment from the State grows the fund to nearly $2.5 million, creating more available capital for early-stage ventures throughout Peoria, Tazewell and Woodford counties.”
In 2005, Illinois captured just 1.1 percent of the $22.38 billion of venture capital invested nationally, and seed and early stage venture capital, which are critical to keeping start-up companies afloat and growing, are even more difficult to come by. Last year, Illinois reported roughly $38 million in seed and early stage capital, just 0.9 percent of the national total, and significantly behind states such as California ($1.8 billion), Massachusetts ($406 million), Texas ($217.5 million) and Pennsylvania ($108.7 million). This data comes from the PricewaterhouseCoopers and National Venture Capital Association MoneyTree™ Report.
The state’s investment in the Tri-County Venture Capital Fund comes from DCEO’s Illinois Seed/Angel Fund, which is investing in other seed stage venture funds in Illinois. Earlier this month, Gov. Blagojevich announced a $500,000 investment in the ARCH Development Fund, which is already investing in promising companies throughout the state. These investments in Illinois funds will not only work to help small businesses grow and create jobs, but will also help to keep these companies in the state.
“In order to have a robust regional economy, it’s important that the necessary resources are available to stimulate the growth and development of our young businesses, especially when it’s a matter of vital start-up dollars that can make or break a promising, high-growth company. I commend Gov. Blagojevich for stepping up to address this need in Central Illinois and across the state, which is a lifeline for many fledgling companies,” said State Senator George Shadid (D-Peoria).
The Tri-County Venture Capital Fund will use the state’s funding to continue to make investments in companies like Peoria-based Firefly Energy Inc., an early stage technology firm that is developing new battery technologies, which significantly enhances the performance of battery power for use in a variety of industries in the $16 billion worldwide lead acid battery market. In 2004, Gov. Blagojevich provided $300,000 in low-interest state financing, along with an additional $350,000 in equity investment, through the Illinois Finance Authority (IFA) to help Firefly purchase new battery test equipment that increased its competitiveness. With over $7 million in funding since its inception in May 2003, Firefly has grown from 3 employees to almost 30 employees, and has spent much of its non-salary money on services from various Illinois-based firms.
“Gov. Blagojevich and I strongly believe that in order to create good jobs we must be strategic about providing our young, tech-driven firms with the resources they need to develop into economically viable and sustainable companies. World-class research is taking place across the state, and too often this research is leaving Illinois because we lack the critical, early stage dollars to move these companies forward. This investment will help to get the ball rolling in what we hope will be a stronger investment climate in the region and across Illinois,” DCEO Director Jack Lavin said.
CLICK HERE FOR MORE INFORMATION ON THE HEARTLAND CAPITAL NETWORK OR TRI COUNTY VENTURE CAPITAL FUND
