NEW YORK, Nov. 4 - Startup biotech companies in southern Pennsylvania may be eligible to take home part of a new $20 million private-equity fund created in part by Big Tobacco settlement money.
Young companies, institutions, or individuals with nascent life-science technologies can apply for as much as $500,000 in pre-seed or seed capital financing, according to BioAdvance, one of three statewide greenhouse agencies that uses tobacco settlement money to nurture local businesses.
The fund "fills a crucial gap in the financial resources available to advance technology beyond the basic research stage," BioAdvance Managing Director and CEO Barbara Schilberg said in a statement today.
While all kinds of life-science companies and researchers can apply, Schilberg told GenomeWeb that applicants must show how, in 18 to 24 months, their idea can be "translated into some financing alternative" like venture capital or corporate partnerships.
"It's not really intended for really, really early discovery that's still 15 years away from being eligible for venture financing," said Schilberg, who added applicants must live in, or be willing to relocate to, southern Pennsylvania. "But certainly we're not limiting the type of project."
BioAdvance plans also to build an in-house venture-cap component during the first three months of 2003. According to Schilberg, this new fund will invest in new firms as well as those that receuved pre-seed and seed-stage financing from BioAdvance. "We just want the best companies within the region to get the money," said Schilberg. "And it doesn't matter whether they come in through us or out of the blue."
BioAdvance received nearly $34 million from the state's $11 billion settlement with the tobacco industry. The fund also pocketed some $2 billion from Pennsylvania as part of a broader plan to strengthen the state's life-sciences profile.
"Venture capitalists are reluctant to do this kind of investment these days," Schilberg said. "They like to do things they know is going to work. We're willing to step in with promising technology and just give it a try. If it works we're going to turn them into companies."
Applicants are told to register by Nov. 19, and can visit the BioAdvance web site to get more information.