Grotech Ventures will be the first venture capital firm to invest in Maryland startup companies using $12 million in state money as part of the InvestMaryland program, state economic development officials said Wednesday.
The firm was selected based on its history of investing in Maryland companies and its overall track record, said Maryland Venture Fund Authority Chairman Peter Greenleaf, who is also CEO of
Grotech will receive a share of $84 million the state raised through a tax credit auction. Two-thirds of the money is slated to go to venture firms like Grotech, to be returned to the state along with 80 percent of any profits in a successful investment. The Maryland Venture Fund, a state-run venture capital arm, will invest the remaining third of the money raised.
The InvestMaryland program was launched last year in an effort to revive the Maryland Venture Fund and spur growth and investment in promising technology companies in Maryland. Earlier this year, Grant Street Group was hired to run the tax credit auction and Altius Associates was hired to choose the venture capital firms to participate.
"The state's investments through InvestMaryland will help attract significant follow-on capital from the private sector, create well-paying jobs and support a wide range of companies in biotechnology, information technology, green energy and other targeted industries," Greenleaf said in a statement.
Grotech was founded in 1984 and invests in companies focused on digital and social media, software, data security, health care information technology and communications technology. Its past local investments include Baltimore-based Advertising.com, which was sold to
Grotech officials were not available for comment because they are in the midst of raising a new investment fund.