Equity Investments - FAQ
What is the typical size of a MassCEC Equity Investment?
The average size of a MassCEC equity investment is $500,000, but investments have ranged anywhere from $100,000 - $1,500,000.. Additionally, MassCEC reserves up to $250,000 per-company for aggregate follow-on investments. Our financial support is designed to decrease over time in accordance with the MassCEC Follow-On Policy.
How does MassCEC compare to a typical private investor?
As an industry-specific quasi-public investor focused solely on cleantech, MassCEC acts as a strategic, value-add investor. We seek to be actively involved in our portfolio companies through Board or Board Observer roles in order to bring as much value to the company as possible. As a public agency deeply involved in the cleantech ecosystem we can also offer a variety of resources to our portfolio companies beyond financial support by leveraging MassCEC’s other various programs and contacts.
Contrary to most traditional investors, MassCEC’s role as a public investor is particularly prominent in the early stages of a company’s development, and tends to lessen over time as the private sector increases its involvement in the company. This is also reflected in our Follow-On Policy, as MassCEC’s relative level of financial support tends to decrease over time.
MassCEC makes its equity investments alongside other private investors, so we invest on standard commercial terms and seek to make a financial return with our investments. However, financial return is only one of several goals, and MassCEC seeks to optimize overall impact with its investments. Some examples of this impact include advancement of technology, job creation, and long-term cost reduction to the ratepayer.
Finally, due to its funding structure, MassCEC can provide more “patient capital” than a typical investor. While we always seek investments with exit opportunities, we do not have stringent timelines for those exits.
Additional details on MassCEC’s investment policy and strategy can be found here.
What does the “significant Massachusetts presence” requirement mean?
Your company 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
Does the MassCEC ever lead rounds?
Yes, we have lead rounds in the past and are happy to make that contribution when it makes sense.
How long does it take for MassCEC to close an investment?
Based on the process outlined above, it typically takes anywhere from 3-6 months from our first meeting with a company to close an investment.
If my company receives an investment from MassCEC, what type of reporting requirements must I comply with?
As a quasi-public agency, MassCEC is required to report on the impact of its investments. In order to do so, MassCEC requires that its portfolio companies complete a semi-annual Request for Information, in which MassCEC requests data around employment, external investment, patent filings and issuances, and financial information, among other information. MassCEC reports on this data in aggregate only, and confidential company-specific information can be exempted from Public Records Law under the Massachusetts General Legislature, Chapter 23J, Section 2(k).
What if my company decides to move outside of Massachusetts after receiving an Equity Investment?
If your company no longer maintains a significant Massachusetts presence as defined above after receiving the Equity Investment, the investment is subject to redemption by MassCEC.