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Ben Franklin Partnership Sparks $25 Million Venture Capital Fund
UNIVERSITY PARK, Pa. -- Central Pennsylvania now has its first federally sponsored venture capital fund dedicated to growing new businesses in central and rural Pennsylvania thanks to Penn State University, government and commercial cooperation.Called Penn Venture Partners L.P., the fund is a joint venture of Penn State's Ben Franklin Technology Partners of Central and Northern Pennsylvania Inc. and Zero Stage Capital Co., Cambridge, Mass., an established venture capital investor. Located in Harrisburg, Pa., Penn Venture Partners will invest $25 million with an additional $6 million in operational assistance available to help companies located in the 34 county region of central and northern Pennsylvania served by the Ben Franklin partners."The 34-county region that we serve has historically lacked the investment capital available in more urban regions of the commonwealth," says Vic F. Russo, director of the partners. "Growth and expansion stage companies in this region will now have a new capital source to obtain financing to grow and hire employees."Russo wrote the proposal that won federal funding from the U.S. Small Business Administration New Markets Venture Capital Program, which makes venture capital available in major markets throughout the country. His proposal was submitted in May 2001 and conditionally approved in July 2001. Only seven out of 23 proposals won conditional approval nationally and six were eventually approved.Having the proposal conditionally approved, however, was just the first step. Russo had to raise $13 million locally, with help from Zero Stage, to supplement $18 million in federal resources. Zero Stage Capital had to establish a Pennsylvania subsidiary to run the fund and a management team had to be assembled. Gene Peck and Dean M. Kline hold the positions of director and deputy director, respectively, of the fund. Mary C. Vovares is the fund's operational assistance program manager.In June 2003, Penn Venture Partners management closed on the fund and received final SBA approval to being operations of the fund. Since then, the fund has provided operational assistance to five projects at Conduit IT of State College, RLW of State College and AlturnaMats of Titusville. Additional projects are pending at other businesses in Titusville, Oil City and Williamsport."The typical candidate company will have minimum trailing 12 month revenue of about $1 million and a management team with appropriate industry experience in place," Peck says."While the fund has a general investment focus that includes manufacturing to technology-related projects and software, transactions in real estate and certain financial services businesses are prohibited," Kline adds.According to the fund managers, companies in the following counties are eligible for investment and/or operational assistance: Adams, Bedford, Blair, Cambria, Cameron, Centre, Clarion, Clearfield, Clinton, Crawford, Cumberland, Dauphin, Elk, Erie, Franklin, Forest, Fulton, Huntington, Indiana, Jefferson, Juniata, Lancaster, Lebanon, Lycoming, McKean, Mercer, Mifflin, Perry, Potter, Somerset, Tioga, Venango, Warren and York.The Ben Franklin Technology Center of Central and Northern Pennsylvania Inc. is a subsidiary of the Corporation for Penn State. With support from the statewide Ben Franklin Partnership, the center provides financial resources on a project basis to develop new or improved products or processes; create new jobs; retain existing jobs; and attract investment capital to Pennsylvania-based companies.Visit Penn Venture Partners LP:www.pennventures.com"