rural venture fund …

Rural Venture Fund …

PurposeTo provide needed capital to an existing

un-served market of small, growing, profitable North Carolina businesses

with future job creation potential. The Fund will fill a gap that is not met by

other organizations in the commercial banks, intermediary lending, venture

capital or angel fund field.


Funding:

N.C. Rural Center : $2,500,000

GoldenLEAF: $ 500,000

N.C. General Assembly: $3,800,000

Total Capital: $6,800,000

UNC System: $75,000 (Technical Assistance)


Elements:

New source of equity-like capital for existing businesses

Priority given to businesses in Tier 1, economically distressed counties

Options range from subordinated debt to equity deals

Terms of ROI less demanding; 5-10 yr plans

Range from $50,000 to $350,000


Elements, cont’d: Existing businesses only; no start-ups

Job growth potential required

Fund will collaborate with SBTDC and UNC School System for intake and due diligence

Businesses agree to tailor-made package of technical assistance as recommended by SBTDC staff.

Packaging tranches from different funding sources

Rural Venture Fund…

Source: NC Department of Commerce

2007 Tier DesignationsArticle 3J

Tier Designations

1

2 & 3

Pitt

Wake

Hyde

Duplin

Bladen

Bertie

Pender

Wilkes

Beaufort

Moore

Onslow

Union

Craven

Halifax

Robeson

Nash

Surry

Sampson

Iredell

Columbus

Carteret

Burke

Brunswick

Johnston

Anson

Guilford

Ashe

Randolph

HarnettWayne

Jones

Chatham

Macon

Rowan

Hoke

Tyrrell Dare

Lee

Stokes

Stanly

Franklin

Warren Gates

Wilson

Forsyth

Polk

Rutherford

Yadkin

Clay

Catawba

Davie

LincolnSwain

Martin

Lenoir

Buncombe

Granville

Davidson

Jackson

Haywood

Person

Caldwell

Caswell

Cumberland

Orange

Pamlico

Madison

GastonCherokee

Richmond

Cleveland

Rockingham

McDowell

Hertford

Alamance

Vance

Avery

Yancey

Mecklenburg

Northampton

Edgecombe

MontgomeryCabarrus

Durham

Graham

Scotland

Greene

Watauga

Currituck

Henderson

Washington

Camden

Transylvania

Mitchell

Alexander

Alleghany

ChowanPerquimansPasquotank

New Hanover

Dare

Dare

Dare

Hyde


University Partners:

Western Carolina University

Appalachian State University

N.C. A & T University

N.C. Central University

N.C. State University

UNC Pembroke

East Carolina University


Fund Structure: Two Advisory Groups

RVF Advisory Board- consists of 7 individuals- meets as needed to discuss Fund

progress

RVF Investment Committee- consists of 7 individuals- meets quarterly, or as needed, to review due

diligence and make deal recommendations

Investment decisions made by Rural Center President and VP of Rural Development Programs


Deal Structure Scenario: Convertible Subordinated Mortgage Bonds

5 year interest only payments Junior collateralization position

Ability to convert debt to equity after specified time period


Outreach & Marketing:

Statewide regional sessions in operation

Sessions strategically located within Tier 1 “clusters”

Collaboration with NCIF of The Conservation Fund

Collaboration with SBTDCs


Contacts:

Don Stewart, Director Cell: 919-605-5210 [email protected]

Ashley Crane, Coordinator Office: 919-250-4314 [email protected]

rural venture fund …

Documents