Venture Debt Investments - FAQ
What is the typical size of a MassCEC Venture Loan?
MassCEC Venture Debt loans can be anywhere from $100,000 to $1,000,000.
How does MassCEC compare to a typical private investor?
A: 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.
MassCEC makes venture debt investments on standard commercial terms and seeks to make a financial return. 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. Because we are seeking to maximize impact, we can structure loans differently from typical private investors. For example, we may offer to waive pre-payment penalties, tie loan repayments to milestones, or provide longer-term loans.
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
What if my company decides to move outside of Massachusetts after receiving a venture debt investment?
If your company no longer maintains a significant Massachusetts presence as defined above after receiving the Venture Debt Loan, the loan must be repaid within an expedited negotiated timeframe.
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).