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Home >> Transference & Innovation >> Second-round Venture Capital Investment
Loans for Second-round Venture Capital Investment
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Note: The following information is an advance on an accompanying measure for loans to venture capital investments in biotechnology companies. It aims at anticipating the main characteristics of the new financial mechanism to potential beneficiaries (technology-based companies and venture capital companies). Therefore, the contents of this page should not be considered binding, rather a guideline, until its final publication in the BOE (official governmental gazette).
Objective
To cofinance second-round investments subscribed by seed and venture capital investors for biotechnology-based companies (approved by the Spanish stock-market commission, CNMV) .
Action Plan
Among the technology-based companies participated by seed and venture capital investors, and particularly among biotech firms, it is usually found second (and subsequent) rounds of investments to finance business activities until the business has begun to generate revenue. The aim of this new mechanism is to co-finance by means of a non-equity loan biotech companies in the consolidation phase, which go on to a second round of investment. However, the venture capital firm must have already shares in the biotech, which accessses this new round of funding. To this extent, the loan has an accompanying and incentive character for the risk capital by mobilising private investments in high-risk technology companies.
The co-financing by Genoma España is set to loans up to €450,000 (€ 150,000/year over 3 years) for the company that reinvests its venture capital in the form of participatory credit without collateral, with a 10% interest rate on the total amount of the loan, after making profits, and only if it has obtained benefits. The loan repayment will be held for upto 10 years with 3 year grace period.
Loan Characteristics
- Maximum amount of credit: 450.000 €
- Maximum percentage: 50% of the total investment
- The total investment must be superior to 500.000 € (preferably between 1 and 3 M€)
Total budget set aside for this line of credit: 2.000.000 €
