As the State’s principal agency for driving economic growth, the New Jersey Economic Development Authority (NJEDA) plays a key role in ensuring that companies in all stages have the financing and resources they need to grow in the Garden State. Early-stage companies have particularly unique challenges when it comes to securing capital. NJEDA offers several options for young companies. To learn more about these programs, please visit http://www.njeda. com/
Heralded as a lifeline for companies that have not yet reached profitability due to heavy investment in product and market development, New Jersey’s Net Operating Loss (NOL) Program enables eligible technology and life sciences companies to sell net operating losses in New Jersey and unused research and development (R&D) tax credits to unrelated profitable corporations for cash.
The cash can then be used for working capital or to fund research. Since the late 1990s, the NJEDA has approved more than $1 billion in funding for over 540 technology and life sciences companies through the NOL Program.
Emerging New Jersey technology and life sciences companies looking to bridge the funding gap between product development and commercialization can apply for a NJ CoVest Fund loan. The Fund provides investments of $100,000 to $250,000 in the form of convertible notes with warrants to eligible New Jersey–based early-stage technology companies. No payments are required on the notes for seven years to allow companies time to grow. NJ CoVest funds charge 3% interest and have a 10-year maturity.
First Lady Tammy Snyder Murphy addresses attendees at the Golden Seeds Kickoff event.
New Jersey’s Angel Investor Tax Credit Program offers investors refundable tax credits against qualified investments for New Jersey businesses. The program supports technology businesses with a physical presence in New Jersey that conduct research, manufacturing, or technology commercialization in the state.
Seen as a means to not only invest in emerging companies but also attract capital into the New Jersey, the Angel Investor Tax Credit Program is open to investors throughout the world, not just those located in the Garden State.
Investments made after January 1, 2020, can benefit from the expanded Angel Investor Tax Credit Program, which increased the tax credit from 10% to 20% of a qualified investment, and added an additional 5% bonus for investments in a business located in a qualified opportunity zone, low-income community, or a business that is certified as minority- or women-owned by the State. More than $530 million in investments have been leveraged through the Angel Investor Tax Credit Program since it began in 2013.
Semi-annual New Jersey Founders & Funders events connect early-stage technology and life sciences companies with potential investors in 10-minute, one-on-one “speed dating” sessions to discuss strategy, business models, and funding opportunities.
Since New Jersey Founders & Funders started in 2014, hundreds of emerging companies have participated in the events, with the majority of participants securing follow-up meetings with at least one investor.
NJEDA joins with venture capital fund managers active in New Jersey’s technology and life science community to form venture investment funds. Our venture partners leverage NJEDA investment to increase funds available for emerging technology and life sciences companies to grow and create jobs in the state. To date, NJEDA has committed over $51 million to 16 venture capital funds since 1999.
Cumulatively, these partner funds invested approximately five times the NJEDA’s investment into more than 100 New Jersey early-stage technology and life science companies. Including other third-party investors, companies in the NJEDA venture fund portfolio have received $2.7 billion of funding.Active portfolio companies employed 1,695 full-time employees as of April 30, 2019.
Understanding the importance of ensuring that investment dollars flow to Garden State entrepreneurs, the NJEDA has partnered with New Jersey First Lady Tammy Murphy to organize a New Jersey chapter of Golden Seeds, a national angel investor network dedicated to investing in women-led startup companies. Founded in 2005, Golden Seeds has a 14-year track record of successfully supporting women-led businesses and has more than 275 members.
In addition, NJEDA launched Research with NJ, a free online portal that provides local, national, and international commercial enterprises, ranging from entrepreneurs and startups to global corporations, with insight into groundbreaking research taking place within the state’s network of research universities, including Montclair State University, the New Jersey Institute of Technology, Princeton University, Rutgers—The State University of New Jersey, and Rowan University.
Potential Research with NJ users include businesses seeking experts to partner with for a business venture or research initiative; global corporations considering relocating or expanding into New Jersey wanting to determine if a suitable academic environment exists to support R&D growth and workforce development; prospective post-graduate students exploring academic programs in a specific STEM field; and investors seeking business opportunities verifying the credentials of a specific researcher involved in a startup business under consideration. In early 2020, Research with NJ surpassed 100,000 unique users.