New Jersey Administrative Code › Title 19 - OTHER AGENCIES › NEW JERSEY ECONOMIC DEVELOPMENT AUTHORITY › Chapter 31X - EVERGREEN › Subchapter 1 - EVERGREEN › Section 19:31X-1.8 - Qualified businesses and qualified investments

Current through Register Vol. 56, No. 14, July 15, 2024
(a) The Authority shall allocate and transfer
				  money credited to the Fund to one or more qualified venture firms for qualified
				  investments as set forth in this section; provided that no more than two
				  qualified investments shall be made with each qualified venture firm in a
				  calendar year.
(b) The Authority
				  shall have a goal for 25 percent of the Fund money that is allocated to
				  qualified venture firms to be reserved for investment in qualified businesses
				  located in opportunity zones. A qualified business shall be considered as
				  located in an opportunity zone if the qualified business has its primary
				  business location in an opportunity zone. For the purposes of this subsection,
				  a primary business location is the location of a qualified business that has
				  the most full-time employees, provided that if two business locations have the
				  same number of full-time employees and each such location has more full-time
				  employees than all other locations, then either of such locations shall qualify
				  as a primary business location.
(c)
				  The Authority shall undertake a disparity study of investment by venture firms
				  in women- and minority-owned business enterprises in this State. Based on the
				  finding of the disparity study, the Authority, following Authority Board
				  approval, may institute a set-aside plan to ensure that Fund money allocated to
				  qualified venture firms is reserved for investment in women- and minority-owned
				  business enterprises in this State.
(d) Any venture firm that has been
				  decertified pursuant to N.J.A.C. 19:31X-1.10(c) shall not be approved for a
				  qualified investment unless and until the venture firm reapplies and is
				  approved for certification pursuant to N.J.A.C. 19:31X-1.7.
(e) The Authority shall establish an
				  application process and determine the form and manner through which a qualified
				  venture firm may make and file an application for a qualified investment. The
				  Authority may accept applications on a rolling basis or on a date set by the
				  Authority, provided that the Authority shall not accept an application based on
				  a qualified venture firm initial investment made more than 90 days prior to the
				  submission of the completed application. The Authority shall provide public
				  notice of the dates for the submission of applications on its website in
				  advance of the initial date for applications. The qualified venture firm shall
				  provide the following information in an application format prescribed by the
				  Authority:
1. With regard to the qualified
				  venture firm and the proposed qualified investment:
i. Information requested pursuant to N.J.A.C.
				  19:31X-1.7(b);
ii. Size of proposed
				  qualified investment requested by the qualified venture firm in the proposed
				  business and the amount invested or proposed to be invested by the qualified
				  venture firm;
iii. Executed stock
				  purchase agreement for the co-investment from the qualified venture firm active
				  fund, or most recent draft term sheet if the co-investment has not yet been
				  made; the limited partnership agreement or equivalent agreement for the
				  qualified venture firm active fund; and the executed subscription documents for
				  the qualified venture firm active fund;
iv. The amount of the reserve set aside by
				  the qualified venture firm for future investments in the proposed business and
				  any related reserve policy applicable to such reserve;
v. The name of any company managing the
				  venture firm; the list of all companies beneficially owning, through rights,
				  options, convertible interests, or otherwise, more than 15 percent of the
				  voting securities or other voting ownership interests of the venture firm; and
				  all companies controlling the direction of investments of the venture
				  firm;
vi. Investment analysis for
				  the qualified venture firm's investment in the qualified business and
				  supporting documentation, and a certification from the qualified venture firm's
				  managing individual that any projections or forecasts provided to the Authority
				  are prepared in good faith and are based upon assumptions that the qualified
				  venture firm's managing individual concludes, in light of the circumstances in
				  which they are made, are reasonable. If the proposed business has not yet
				  recorded 12 months of revenues or customers and has not raised third-party
				  capital, the investment analysis shall include qualified venture firm's
				  prepared base case future projections with projected revenues, customers, or
				  fundraising for the next three to five years;
vii. Names of individuals or entities with
				  ownership, through rights, options, convertible interests, or otherwise, of the
				  venture firm; that manage the venture firm; or that have rights to control the
				  direction of investments of the venture firm; and
viii. A completed legal questionnaire
				  disclosing all relevant legal matters, in accordance with the Authority
				  debarment and disqualification rules at N.J.A.C. 19:30-2;