![]() For example, such investments can aid Minnesota in expanding its economic ecosystem and benefit Minnesota residents by bolstering in-state economies through, for instance, the creation of, and increase in, demand for in- jurisdiction business products and services. Any investment in small businesses located outside of Minnesota will require a reasonable explanation of the benefits of that investment to businesses located in the jurisdiction. Minnesota's SSBCI funds are intended to benefit the state, its businesses, and its residents. ![]() Consistent with industry standards on payments of fees to cover these services to portfolio companies, the fund should reimburse the jurisdiction for payments of such services by SSBCI funds before returns are paid to the general or limited partners. The agreement between the fund and the portfolio companies should include disclosure of these services offered by the fund manager. In the contractual agreement between a jurisdiction and a venture capital fund, the fund must identify the services to be provided to portfolio companies and annually certify that these services were provided. ![]() As these services to portfolio companies are a type of equity support, SSBCI funds may be used to pay for such support up to an annual average of 1.71 percent of the federal contribution to a venture capital fund over the life of the jurisdiction's venture capital program. These services vary depending on the portfolio company's stage in the venture capital ecosystem. These services can include, for example, financial management, operational guidance, IT consulting, and connecting portfolio companies to potential customers, investors, board members, and officers. Venture capital funds offer a variety of services to their portfolio companies. If, however, a transaction supported with SSBCI funds meets program requirements, an entity may use SSBCI funds alongside a transaction that generates tax credits. Tax Creditsįund managers may not combine financing from private tax credit-supported entities (i.e., entities that are funded through the sale of tax credits they received from a state) and SSBCI-supported programs for the same business purpose, or within the same investment or loan fund.Īn SSBCI-supported transaction cannot be used by an entity to increase the pool of funds that generates New Markets Tax Credits or Historic Preservation Tax Credits. If SSBCI capital is invested through a venture capital fund, the fund or entity manager must have exposure to the risk of its portfolio in a manner that is consistent with industry standards. Equity investors have a meaningful amount of capital resources at risk if these investors establish terms whereby the private capital is pari passu with, or junior to, the SSBCI investment in cash flow rights. SSBCI rules require that each investor has a meaningful amount of capital resources at risk. Important definition, compliance and certification information is located in the tabs below. Applicants should submit signed certifications to OIB when directed. All SSBCI programs and transactions require the Investor (Fund) and Investee to submit specific certifications located on the Certifications tab. ![]() Information on various SSBCI compliance issues can be found in the tabs below. SSBCI programs must meet certain criteria and compliance standards. The Multi-Fund Venture Capital Program is managed by the University of Minnesota Office of Investments & Banking (OIB). This program is expected to target key sectors such as advanced manufacturing, agtech/foodtech, climate tech, life sciences, software, and technology. The program will invest in Minnesota-based venture capital funds that target seed and early-stage investments in Minnesota-based startups. Minnesota's State Small Business Credit Initiative (SSBCI) programs include the Multi-Fund Venture Capital program.
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