Agenda for Growth: Capital resources for growing your business

Sources of capital to support growth in less-populated northern New England can present challenges to New Hampshire companies. Compared to Massachusetts, comparatively few “traditional” (i.e. technology) venture capital businesses emerge from the region and fewer regional venture capital funds exist to serve the marketplace. Apart from activity in the southern part of the state, very little capital reaches into the New Hampshire market.

Most growing companies need capital along the spectrum of finance to sustain or accelerate their development and growth. The spectrum often begins with founders seeking funds from friends and family, moving on to low/no cost state and federal grant sources, and finally seeking angel and venture capital equity financing (when appropriate) to reach a stage where bank financing can complete financing requirements.

Each state has its own suite of grants, near-equity and equity capital sources. Relative to its sister northern New England states, however, New Hampshire has among the most diverse capital resources in the region.

These include more formal angel investor groups than Vermont and Maine combined, unique and dedicated sources of venture capital equity and near equity funds, several grant resources and other specialized funding sources.

Grant financing remains one of the best sources of funding for companies, when available. Grants do not need to be paid back and do not “dilute” ownership.

In New Hampshire, there are several sources of state/federal grant financing sources. Among these are:

• Sector-specific grants, such as development loans and grants offered through the U.S. Department of Agriculture’s Rural Business initiatives for agriculture/rural-themed businesses.

• Federal Small Business Innovation Research (SBIR) grants that support a wide range of technology development works at the pre-commercialization level.

• The state-sponsored New Hampshire Business Plan Competition, one of the newer sources of state financing sources for entrepreneurs, offering one of the largest competition awards in the country.

For those companies seeking longer-term equity capital, a range of choices exist:

• Angel groups: Angel investors are wealthy individuals who invest their own funds in companies they find interesting. Groups of individual angels have pooled their efforts and capital to create Angel Networks, of which there are at least four in the state: The Breakfast Club (Nashua); First Run (Mt. Washington Valley); eCoast Angels (Seacoast); and Granite State Angels (Upper Valley).

• Near equity: The New Hampshire Community Loan Fund has created a “near equity” program called Vested for Growth, which takes equity risk but structures investment in the form of debt plus royalties, creating a non-dilutive alternative to venture capital that does not require the company to sell or go public to return capital to investors.

• Venture capital funds: New Hampshire-focused funds include Borealis Ventures and CEI Community Ventures (CCVI). Borealis focuses on early-stage technology, while CCVI invests in technology-based companies and others across various sectors and stages.

Entrepreneurs in New Hampshire have an unusually diverse mix of capital sources to grow their businesses. While each source has its own requirements and demands, New Hampshire offers a terrific assortment for businesses to approach.

Michael Gurau is president of CEI Community Ventures Inc., a $10 million venture capital fund targeting New Hampshire, Maine and Vermont and co-sponsor of the Dec. 7 Agenda for Growth conference. Gurau, with 11 years in the venture capital industry and four years of startup experience, was a presenter for two sessions at the conference: “Spectrum of Financing, from Grants to Venture Capital” and “What’s my company worth? An introduction to valuing your business for growth and capital.” For more information, visit or call 207-772-5356.

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