State Focused Investment Funds

ECP manages investment funds in seven states that were formed through public-private partnerships and are enhanced by state tax credits. ECP raised funds from private sector sources to invest through these funds, which have a dual bottom line focus of investment returns and economic development in targeted areas. The socioeconomic benefits of these state-focused funds are well documented. These programs create jobs, increase tax revenues, establish local venture capital infrastructure and in some cases, reward states through participation in a fund’s investment performance. Several universities, economic research groups and state auditors have analyzed the economic impact of these programs. Among their conclusions, the studies find that every dollar of subsidized capital attracts an additional six dollars or more of outside institutional capital. In addition, in nearly all cases, the revenue created from job creation far outweighs the cost of the tax credits. These and other positive findings have led several states to enact multiple programs.

ECP currently manages funds in New York, Texas, Colorado, Alabama, Louisiana, Tennessee and the District of Columbia. The company has local investment professionals in these states who work together with the New York-based investment team on all transactions. ECP is actively seeking new investment opportunities in small businesses with excellent growth prospects across the country. ECP is a generalist investor and is willing to consider businesses in any industry that exhibit strong fundamentals.

ECP applies the following general criteria when evaluating a prospect for potential financing:

• Business Viability: Elements of an economically viable business must be evident, such as financial stability and a high degree of potential to achieve overall projected results. Industry growth prospects must also be favorable.
• Dedicated and Competent Management: The company’s management must share ECP’s objectives for business growth and capital appreciation.
• Market Potential: Each company must exhibit a high degree of potential to achieve its forecasted sales volumes due to identifiable competitive advantages, dominant market position, proprietary product or service, technological superiority, history of product quality and service, or other similar market advantages.
• Rate of Return: There must exist a high probability of achieving ECP’s desired rate of return through a combination of current income and/or capital appreciation.