Program Description
The SGL Program is designed to help bridge the early-stage funding gap that many North Carolina biotechnology companies face. Through the SGL program, loans of up to $250,000 with favorable, market-competitive terms are available for North Carolina-based biotechnology companies. Importantly, SGL funds must be matched by an equal investment or loan from an angel fund or a venture capital (VC) fund. This program is intended to provide a North Carolina-based biotechnology company with a significant level of funding that should enable it to reach a specific and meaningful milestone required to obtain further funding.
Rationale
The North Carolina Biotechnology Center (“Biotechnology Center”) recognizes the importance of emerging entrepreneurial companies to North Carolina’s biotechnology industry and has long been committed to providing financial assistance to these companies. There is a growing need for funding sources in the gap between pre-seed and angel- or venture-type investments.
Objectives
Unlike other Biotechnology Center loans, funding through this program is not restricted to company-sponsored research. It is available for meeting other company needs including, but not limited to, building internal expertise, hiring key, non-“C-level” (e.g., not CEO, CSO, etc. level) employees, up-fitting facilities, solidifying the company’s intellectual property position, and pursuing critical business development / licensing activities. SGL funds will not be used for building physical facilities, paying the salaries or other benefits for “C-level” executives or paying off existing debt, though these restrictions will not extend to the funds provided by the other investor.
Eligibility
In order for a candidate company to be eligible for the SGL, it must:
- be a North Carolina-based biotechnology
company in the life sciences, natural products,
agricultural, veterinary, environmental or industrial arenas that has not previously been
awarded a SGL; - have achieved a robust technical and
commercially promising validation / milestone
(e.g., proof-of-principle for its intended product or application) through Biotechnology
Center research funding awards (i.e., Small Business Research Loan or SBIR Bridge loan)
or some other source (e.g., federal SBIR grant, angel investment, founders money) or any
combination thereof.
Requirements of a Candidate Company
A candidate company will be expected to:
- submit to both the Biotechnology Center
and the other investor a business plan and
a proposed budget containing a detailed description of the use of funds; - undergo independent due diligence conducted by the Biotechnology Center in addition to due diligence conducted by the other investor;
- independently achieve a commitment from an
angel network or VC to an investment or loan
at least equal in amount to the amount being sought from the Biotechnology Center; - provide evidence that the amount of the loan and investment envisioned through the SGL will enable the company to achieve a specific, meaningful milestone or event (“Fundable Event”) that would position the company for follow-on investment by angel networks or VC’s, and;
- identify key business milestones required for subsequent, upcoming rounds of financing and a funding strategy (including the number of rounds and amount required) to reach these milestones.