What is a convertible grant?
A: A convertible grant is a financial instrument that is initially provided as a grant and, upon obtaining a Qualified Financing or other funding milestone, the grant converts into an equity stake in the company. If a Qualified Financing or other funding milestone is not reached, the convertible grant remains a grant until the term expires, at which point it may convert into equity at the then current fair market value, at MassCEC’s option.
If I am awarded a convertible grant under AccelerateMass, what happens when I raise a Qualified Financing?
Upon raising a Qualified Financing, the AccelerateMass convertible grant will convert into the same equity security issued in that Qualified Financing. The number of shares that the grant converts into will be based on the share price of that round and will also take into account a tiered, time-based discount. At that time, MassCEC becomes an equity holder in the company and has rights similar to other investors.
What is a Qualified Financing?
A Qualified Financing is any sale of the company’s capital stock or other equity interests in a single transaction or series of related transactions amounting to $750,000 or more.
What if I raise a Qualified Financing before I apply for or receive my Phase 2 Award?
A Qualified Financing is a significant milestone and may demonstrate investor/commercial traction. Therefore, if you raise a Qualified Financing before receiving a Phase 2 Award, MassCEC will consider awarding the Phase 2 Award at the time of the close of the Qualified Financing. Both the Phase 1 and Phase 2 Award would then convert into the securities issued in the Qualified Financing.
What does the “significant Massachusetts presence” requirement mean?
You must have a majority of the following offices based in Massachusetts (as applicable) in order to have a “significant Massachusetts presence”:
- Company headquarters
- Primary research and development operations
- Primary sales and marketing office
- Primary manufacturing operations
What if my company decides to move outside of Massachusetts after receiving an AccelerateMass award?
If your company no longer maintains a significant Massachusetts presence as defined above after receiving the AccelerateMass award, the award is subject to redemption by MassCEC.
What if my company is not currently located in Massachusetts, but is interested in relocating there?
Out-of-state companies are eligible to apply for AccelerateMass if they are seriously considering a move to Massachusetts, and part of our Phase 1 review process will be gauging the company’s commitment to relocating. Disbursal of a Phase 1 award will be contingent on proof that the company now meets the “significant Massachusetts presence” requirement. Following notification of award, companies will be given a 3-month grace period to provide proof of relocation.
Can MassCEC assist companies in relocating to Massachusetts?
Ultimately, companies are responsible for finding their own space in Massachusetts. However, there are numerous incubators in the Commonwealth that may be a good fit for companies at this stage, including:
For more information on clean energy incubators in Massachusetts, please visit our Massachusetts Clean Energy Incubators page.
My application contains sensitive materials. What is MassCEC’s policy on confidentiality?
As a public entity, MassCEC is subject to Massachusetts' Public Records Law, codified at Chapter 66 of the Massachusetts General Laws ("Public Records Law"). Any documentary material, data, or other information submitted to MassCEC are presumed to be public records. An exemption to the Public Records Law may apply to certain records, including materials that fall under certain categories under a statutory or common law exemption, including the limited exemption at Massachusetts General Laws Chapter 23J, Section 2(k) regarding certain types of confidential information submitted to MassCEC by an applicant for any form of assistance.
In line with Public Records Law requirements and with regard to companies in which MassCEC makes equity and debt investments, MassCEC generally considers the following types of information as confidential:
- Board meeting minutes
- Capitalization Table
- Budgets and Financial Projections
- Current and Historical Financial Statements
- Confidential Information Contained in Pitch Deck
- Term Sheet(s)
- Investment transaction documents
- Details of strategic partnership or exclusivity agreements (if not already public)
- Customer contracts
- Supplier contracts
- Technical product drawings or descriptions
- Employee agreements
- Details of fundraising history (major investors, pre- and post-money valuations, etc.) (if not already public)
- Product pricing
- Sales pipeline
- R&D roadmap
- Profitability margins
If I have already received a Phase 1 award under AccelerateMass, and have since completed another accelerator program, am I eligible to apply again for Phase 1?
No, prior Phase 1 awardees are not eligible to receive additional Phase 1 awards.
Further, MassCEC shall have the right to disclose the name of any payee, the amount of the award and any other information it may deem reasonably necessary on Open Checkbook, the Commonwealth of Massachusetts’ online database of state spending.