NEW YORK – The New York City Economic Development Corp. in September issued a request for proposals for a venture capital investment adviser and law firm to manage and structure the city’s newly created Emerging Industries Fund.
The $25 million vehicle will provide equity and/or debt financing for small, fast-growing companies in the Big Apple, Mayor Rudolph Giuliani announced at the early September launch.
The city plans to invest the fund in early-stage Internet, biotechnology, software and telecommunications companies that are located in or plan to move to New York. In early 2000, the fund will start making investments ranging between $100,000 and $1.5 million, with an emphasis on investments of less than $750,000.
The vehicle will be managed by the yet-to-be named venture firm, but investment opportunities will be approved by a seven-member board – four of whom will be appointed by the Mayor and three by the city council.
Proposals by venture capital firms and law firms were due to the Economic Development Corp. by October 22. Candidates familiar with the New York City financial community and the city’s tax structure will be most desirable, said the Economic Development Corp.
The city’s first $76 million Discovery Fund, launched in 1995, backs late-stage technology companies with investments ranging between $1 million and $6 million over several rounds of financing. At press time, the vehicle, managed by Prospect Street Ventures, made 15 investments totaling $58.1 million in companies such as 24/7 Media Inc. and Comet Systems Inc.
Unlike the Discovery Fund, which was funded by the Economic Development Corp., Brooklyn Union Gas, New York Power Authority and Con Edison, the Emerging Industries Fund will be entirely funded by the city.