Equity Investments and Venture Debt

The Challenge: Grow Massachusetts-Based Climate Technology Companies

Seed and early-stage climatetech start-ups face funding gaps that threaten their path to market. Access to capital is limited by both funding availability and high technological risk. 

About the Equity Investments and Venture Debt Program

MassCEC invests impactfully and countercyclically in Massachusetts’ brightest climate technology innovators.  Our investments support climatetech and cleantech companies as they de-risk their technology, reach early commercial milestones, and attract growth funding. 

Equity investments average about $500k in early-stage financings. MassCEC also offers venture debt, ranging from $100k to $1M.  

MassCEC's strategy is to attract and leverage significant private capital alongside all our investments. We primarily invest under MassCEC’s focus areas, but additionally search for technologies with a significant impact potential outside of these areas: 
- Clean Transportation 
- High-Performance Buildings 
- Net-Zero Grid 
- Offshore Wind 

See MassCEC's Portfolio

Status
Open
Award Potential
Investment up to $1,000,000
Application Deadline
Ongoing
Questions? Contact

Funding Schedule and Process

MassCEC considers new investments on a rolling basis.

The timeline from pitch to close of investment is typically three to five months.

Step 1: Contact MassCEC’s Investments Team via investmentsmcec@masscec.com for an initial meeting. Please provide a pitch deck with your email.

Step 2: Pitch to the MassCEC Investments Team.

Step 3: If MassCEC determines that your company is a potential fit for an investment, staff will request and review due diligence materials as part of an iterative diligence process. 

Step 4: Pending a positive diligence outcome, pitch to MassCEC's CEO and other executive-level staff.

Step 5: Negotiate deal terms and begin initial legal documentation.

Step 6: Final approval

Step 7: Complete legal documentation and close deal.

Who's Eligible

Eligible applicants include Massachusetts-based startups whose products or services are consistent with the definitions of “clean energy” or “clean energy research” as provided in MassCEC’s enabling legislation, Mass General Laws, Part I, Title II, Chapter 23J, Section 1.

In addition, we typically require at least three of the following four functions be based in Massachusetts:

  • Company Headquarters
  • Primary research and development
  • Primary sales and marketing
  • Primary manufacturing

Is this program not quite right for your company?  Check out the Additional Funding Opportunities described below.

FAQs

What is the typical size of a MassCEC investment?

The average size of a MassCEC equity investment is $500,000, most commonly ranging between $250,000 to $600,000 (but investments have ranged anywhere from $100,000 - $1,500,000). Additionally, MassCEC reserves significant capital per company for follow-on investments and continued support. Our financial support is designed to decrease over time in accordance with MassCEC's follow-on investment policy

What is the typical size of a MassCEC venture debt investment?

MassCEC's venture debt investments can be anywhere from $100,000 to $1,000,000.

How does MassCEC compare to a typical private investor?

As an industry-specific publicly-funded investor focused solely on cleantech/climatetech, 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 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

Additional Funding Opportunities