FAQ for IDEA Fund
1. MTC invests in scalable, high-tech startups.
2. Your company must be located in Missouri, or willing to relocate to Missouri.
3. Your company’s technology must fall into one of our five focus areas: animal health, applied engineering (software), biomedical science, defense and homeland security, and plant science.
As an economic development program for the State of Missouri, MTC only makes direct investments in companies based in Missouri.
While MTC will determine if a company meets the organization’s required economic development impact on the State of Missouri on a case-by-case basis, historically if all of the following statements are true, MTC has considered that a company has met the Missouri-based company requirement.
· The company is registered to do business in the State of Missouri.
· The corporate headquarters are in Missouri, and the company publicly purports to be a Missouri-based company.
· The company has an active lease for a Missouri-based office that corresponds with the Corporate Headquarters address.
· The founders (including all co-founders) are Missouri residents.
Companies that have not met all of the criteria outlined above may still be considered eligible to receive an investment from MTC’s IDEA Fund, but the company will be required to provide a statement of current and future economic development for review by MTC’s Investment Committee or Executive Committee.
1. Animal Health – products and services related to the health and nutrition of companion and livestock animals including but not limited to animal feed, comparative health, diagnostics, human food supply, veterinary drug development and delivery, and veterinary science
2. Applied Engineering – the use of engineering to develop innovative product and service solutions for technological issues including but not limited to advanced manufacturing, advanced materials, clean energy generation and storage, creative content, digital and convergence media, and information technology.
3. Biomedical Science – products and services related to human health including but not limited to biomaterials, diagnostics, drug development and delivery, information technology related to human health, medical devices and pharmaceutical manufacturing
4. Defense and Homeland Security – products and services related to national defense and national security including but not limited to the development, assembly, maintenance and modification of military equipment, homeland defense-related solutions and related suppliers
5. Plant Science – products and services related to plants and plant-derived materials including agricultural yield enhancement, biofuels, food, fiber, plant-derived chemicals, and value-added agriculture technology product
MTC has three active programs within the IDEA Fund. Each program is intended to correlate to a different stage of the startup life cycle. It is suggested you reach out to MTC to discuss where you may best fit.
- TechLaunch Program – This is MTC’s pre-seed funding program. There are many indicators of a company’s place on the startup life cycle spectrum, but this program was developed for companies that have raised less than $250k of outside capital and are currently raising between $500k to $1M.
- Seed Capital Program – The Seed Capital Program was designed for companies who have spent substantial time in research and development or refining their product and identifying early ‘adopter customers’. The program targets companies that have raised approximately $500k to $2M of outside capital and are currently raising between $1M to $5M. Ideally, the seed capital provided by MTC will be leveraged to develop the company and product to the point venture capital groups will invest.
- Venture Capital Program – The Venture Capital Program was designed to accelerate private venture capital investment in Missouri-based start-up companies and to increase the overall investment impact of third-party investments. The program targets companies that are currently raising between $5M to $20M, and have identified a potential lead investor. The capital provided by MTC will be leveraged to attract additional venture capital funds to participate in the round, and accelerate the growth of the company.
MTC has a quarterly investment cycle.
These highly competitive application-based programs are subject to a thorough 9-step investment review process that reflects MTC’s core values of integrity, transparency, accountability, independence, and collaboration: MTC Investment Review Process
For each dollar that we invest, you must secure one dollar of investment from private sources to match MTC’s investment.
Please keep in mind that MTC prefers its investment to represent between 15-25% of the new capital being invested in a company.
MTC uses a matching fund requirement to ensure that the state and federal funding will be invested in the most attractive Missouri-based early-stage investment opportunities.
Generally, MTC will match investment dollars paid to a company in exchange for the issuance of convertible debt or equity securities only. MTC will not consider grant funding as satisfaction of the match requirements. MTC will not consider investments made in exchange for services provided or in-kind investments as eligible matching funds.
Additionally, applicants will be required to provide information regarding proposed Co-Investor. MTC will review such information on an individual basis to determine if such co-investment and involvement with the company qualifies as an eligible source of matching funds.
Traditionally our IDEA Fund Co-Investors are individual angel investors, Missouri-based angel investor networks or seed-stage venture capital funds. MTC expects Co-Investors to provide more than providing financial support; each Co-Investor is expected to be actively involved in the company’s operations either directly or in an advisory capacity. The level of active involvement varies depending on the size of MTC’s investment, the stage of development of the company and the oversight and voting rights MTC is entitled to as a result of its investment.
Generally, the investment terms offered by accelerators and incubators have not qualified as matching funds since accelerators and incubators tend to receive more ownership in the company compared to their capital investment given the additional services and resources provided to the company.
Additionally, MTC generally has not considered investments pooled from an equity crowdfunding platform or an AngelList syndicate as qualified Co-Investors since such investors do not play an active role in managing and advising the company.
MTC’s program contemplates closing on MTC’s investment simultaneously with all matching investors. However, in limited circumstances where an applicant can demonstrate significant burdens to such simultaneous closing, MTC is willing to consider alternative matching fund closing scenarios.
MTC will invest under the same deal terms as negotiated by the co-investor(s), assuming an arms-length transaction reflecting market realities. Should the proposed terms be unreasonable MTC will invest under terms more in line with standard market rates.
MTC may require a security interest when investing through a convertible note.