Welcome The Seaway Private Equity Corporation is investing in the power of the North Country's future by providing early stage equity capital funding for companies with significant growth potential located in St. Lawrence County, New York, USA. We thank you for your interest and invite you to learn more about the Seaway Private Equity Corporation, the investment process we follow, our criteria for submissions and answers to our most frequently asked questions by reviewing the links which follow. Who We Are The Seaway Private Equity Corporation (SPEC) makes early stage equity investments in companies that demonstrate significant growth potential who choose St. Lawrence County, New York (USA) for their principal business location. Through such early stage investment, SPEC intends to help bring employment and economic opportunities to the North Country. Investment Focus SPEC focuses its investments on the commercialization of new products and services in the areas of renewable energy and environmental technologies. By investing in the power of our future, our hope is to bring quality jobs to the North Country and spur critical developments to improve the global environment. To determine which projects qualify for SPEC investment, please review our Investment Process section.
Business Development Firms We realize that developing or commercializing new technologies can be a daunting task. To better position early stage companies for success, SPEC contracts with Qualified Business Development Firms. As your partner, a SPEC Qualified Business Development Firm owns a minority interest in your company and works with you to define your company s business strategy and exercises oversight and/or control of certain business operations. Board & Operations SPEC is a private, not-for-profit corporation operating in St. Lawrence County to oversee the disbursement of up to $10-million made available through the New York Power Authority. The purpose of SPEC is to create quality job opportunities by attracting the development of new technology companies - especially those focused on renewable energy and environmental technologies. The membership on SPEC's Board of Directors includes: SPEC Role Member Name Professional Affiliation President Dr. Anthony Collins President, Clarkson University Vice President Mr. Ronald McDougall President, AFL-CIO Central Trades Council Secretary Ms. Karen M. St. Hilaire St. Lawrence County Administrator Treasurer Mr. Raymond H. Fountain CEO, St. Lawrence County Industrial Dev. Agency Member Mr. John B. Johnson Chairman/CEO, Johnson Newspaper Corp. Member Mr. Richard Maginn Owner, Heritage Homes Inc. Member Mr. Frank S. McCullough, Jr. Chairman, New York Power Authority Member Mr. Thomas A. Nichols Legislator, St. Lawrence County Board of Legislators Member Mr. Michael J. Santarcangelo Director, World Trade Center URIR Program, Empire State Development Corp. The operations of SPEC are coordinated by CITEC Inc.
Investment Process You have a great idea and now you're looking for early stage capital to help you develop and/or commercialize it. If such capital is to come from the Seaway Private Equity Corporation (SPEC), the companies it will invest in must: Have complete control of their technologies (proprietary, patented and/or patentpending technology); Be committed to locating or principally operating their new technology company in St. Lawrence County, New York; Offer market-changing technologies that will demonstrate significant advantages and differentiation to create a sustainable competitive advantage and take a leadership position in its market; and, Have a well-developed, concise business plan which makes a compelling case for success (see our business plan criteria). Investment Philosophy We want you to succeed. So, SPEC invests its available funds through Qualified Business Development Firms that have outstanding records of attracting private equity investors and expertise in developing successful new business ventures. As partners, they can take your renewable energy, environmental or other SPEC Board-approved technology and create employment opportunities for the region. Although SPEC s Qualified Business Development Firms do not seek controlling ownership in companies in which they investment, they play an active role in developing and managing the business. They prefer to invest as co-founders in new businesses and hold common shares with other founders; work to position the business for traditional venture funding or liquidity events; then, exit through subsequent funding rounds and/or liquidity events.
SPEC investments support: New technology companies that are headquartered in and principally operated in St. Lawrence County, New York, USA; and, Primarily companies based on renewable energy and environmental technologies. Investment not based on such technologies may also be made with approval by a two-thirds vote of the entire SPEC Board of Trustees. The investments made by SPEC are neither grants nor loans; rather, they represent equity investments for which SPEC takes stock in the companies. SPEC's early stage investments are usually made prior to investment by traditional venture capitalists or other financing parties. SPEC provides the funds that will help bring companies to the point where traditional venture capitalists might become interested in the businesses. SPEC oversees the placement and use of the funds it invests but neither develops the technology nor the businesses in which it invests. It does this through Qualified Business Development Firms that provide important guidance during the critical early stages of startup, as well as bring private cash to match SPEC's investment at a ratio of $2 private for every $1 of SPEC funds. How We Invest The New York Power Authority has contracted with SPEC to disburse funds for the purpose of attracting private equity investors and making private equity investments in new business opportunities in St. Lawrence County, New York. SPEC's agreement with the New York Power Authority includes the following investment criteria and procedures: Eligible investments are limited to new technology companies that are headquartered in and principally operated in St. Lawrence County, New York; and based on renewable energy or environmental technologies (or others as approved by a two-thirds vote of the SPEC Board);
Maximum investment amount: $1,000,000 Minimum investment amount: $75,000 Total amount of investment capital available to SPEC: $10,000,000 Minimum amount of matching private investment: $2 for every $1 of SPEC funds SPEC makes these investments only through Qualified Business Development Firms with whom it has contracted and who are responsible for attracting private equity investors. Qualified Business Development Firms are companies that are headquartered in and principally operated in St. Lawrence County, New York, which have been approved by the New York State Power Authority. The Qualified Business Development Firms make early-stage investments in new technology companies as well as provide guidance through active participation in the management of the new technology companies in which they invest. In addition, Qualified Business Development Firms maintain a qualified advisory board that include at least one senior executive from a multi-national company, at least one individual possessing significant experience working for a professionally managed investment fund and at least one professional with significant entrepreneurial experience. Currently, SPEC contracts with the following Qualified Business Development Firms: Golden Technology Management, LLC North Bay Technology Development If your firm meets the above requirements and wishes to seek approval as a Qualified Business Development Firm, contact us.
Investment Criteria SPEC is only able to invest its funds in a Qualified Investment Opportunity, which is either a Qualified Enterprise or a Qualified Project. A Qualified Enterprise is a business that is developing and/or commercializing proprietary, patented and/or patent-pending technology. A Qualified Project is a special purpose entity that has formed for the purpose of owning a renewable energy or environmental project (or other project agreed to by a vote of two-thirds of the entire SPEC Board of Trustees) that utilizes the proprietary technology of a Qualified Enterprise. Additional requirements for both Qualified Enterprises and Qualified Projects include: Being headquartered in and principally operated in St. Lawrence County; and, That will either directly increase employment opportunities or have the ability to attract new industry that will increase employment opportunities in St. Lawrence County. Submissions Qualifying Questions Entrepreneurs with great new technology ideas that meet our investment focus and criteria, should ask themselves these three questions before contacting us: 1. Am I prepared to locate the company based on my technology and associated business ideas in St. Lawrence County, New York, USA? Please understand that we are restricted to investing our funds only in companies that will locate in or principally operate from St. Lawrence County. 2. Am I willing to partner with a Qualified Business Development Firm in a manner that allows it to own a minority interest in my company, while working with me to define business strategy and exercise oversight and/or control of certain business operations? If not, you should look at other possible investment opportunities. 3. Is my technology and associated business ideas likely to be market
changing? SPEC s Qualified Business Development Firms derive their compensation mostly from the success of the companies in which they invest their money and time. If the companies are not successful, they receive little or no reward. As a result, their interest lies only in partnering with ventures that have a likelihood of making it big. If you could answer yes to all three questions, then your next step is to contact one of our Qualified Business Development Firms. Currently SPEC has contracted with the following Qualified Business Development Firms: Golden Technology Management, LLC North Bay Technology Development Contact The Qualified Business Development Firm When you contact a SPEC-Qualified Business Development Firm, you should be prepared to submit a concise, complete and compelling business plan. Such business plans should address as many of the following criteria as possible: The Market The market is large, preferably growing and on the verge of (or currently undergoing) paradigm shifts. The shifting market is creating an unmet need or a new opportunity related to the activity of market participants. These participants and their needs are readily identifiable and/or measurable. Adequate numbers of customers/buyers (do currently or will at the right time) possess urgent motives and adequate budgets to purchase the offering. Markets consistent with our focus in energy and the environment receive the most attention. The Offering The offering is game changing and a clear and compelling message about the offering can be readily constructed for the market. The offering is based on deploying proprietary and reliable technology to meet the market need/opportunity. The offering delivers a substantial and readily measurable ROI for the buyer. In the absence of a directly measurable ROI, the offering is oxygen for the buyer and due to a fundamental market change the buyer cannot survive without it. There is a compelling top line and earnings impact associated with delivery of the offering.
The Business Model The business is a first mover. It is defendable and/or differentiated from the competition. The production/manufacturing, sales and operations models are scalable and the model produces attractive margins. There is definable, maintainable direct and/or channel access to customers. There is minimal friction in the sales process. The Management Team The people are capable, highly motivated, passionate and personally and financially committed to the venture. Members of management are clearly and equitably aligned with each other and with other stakeholders on the up and downside. The Transaction The transaction is straightforward, without any financial or legal frictions and free of unnecessary contractual complications that translate into costs, risks or upside financial limits. The opportunity can be adequately capitalized to flow cash and readily prepared for subsequent venture financing or a liquidity event. The valuation is attractive. Stakeholder Alignment Stakeholders share agreement/interest in the same tangible and intangible aspects of the opportunity. Examples of such alignment may include sharing of ideals, agreements on business strategy, desired time to exit or financial vs. strategic interests. We believe that strong stakeholder alignment significantly improves the business dynamic. After the Qualified Business Development Firm receives your business plan, its professional personnel will undertake due diligence to confirm the information you provide. This standard procedure involves challenging every assumption presented and conducting independent, in-depth analyses of the markets, competition and potential for your product or service. For more information, business plan consideration and investment status inquiries, your points of contact are currently: Golden Technology Management, LLC Email gaus@goldentechpartners.com North Bay Technology Development Email profit@northbayassociates.com For all other inquiries, please contact: CITEC, Inc. / Operational Coordinator for SPEC 65 Main Street, Suite 101 Potsdam, New York 13676 Phone 315.268.3778 Email solutions@citec.org
Frequently Asked Questions What does SPEC stand for? SPEC is an acronym for the Seaway Private Equity Corporation a private, not-for-profit corporation located in St. Lawrence County, New York. It is responsible for overseeing the disbursement of up to $10- million in early-stage investment funds to attract the development of technologies and their associated businesses in St. Lawrence County, particularly those focused on renewable energy and environmental technologies. Where does the funding come from? Project funding comes from two sources. SPEC s investments are funded by a long-term $10 million loan from the New York Power Authority. The balance of the funding comes from private investors at a ratio of $2 private to each $1 SPEC funding assembled by a Qualified Business Development Firm. Who can apply? We invite your inquiry if you have a market-changing technology in the area of renewable energy or environmental technologies (any others must be approved by a two-thirds vote of our Board of Directors); have complete control of the technology; are committed to principally operating your new technology company in St. Lawrence County, New York (USA); and, are able to submit a business plan that makes a compelling case for success. What criteria are there for applying for funds? Before applying for funds, you should read through the Investment Process and the overview of the Investment Criteria we require. In addition, we suggest you answer the three questions and review the requirements of your business plan, as detailed on our Submissions page. How are the funds repaid? Both types of investors SPEC and the private firms get repaid as equity investors from the profits generated by or proceeds of the sale of the enterprises in which they invest. Is this a grant or loan? Neither. SPEC is an equity investor in the enterprises it finances. Who provides the investment money? The money comes from two sources the New York Power Authority and private investors. The New York Power Authority has made up to $10-million available for the purpose of creating quality jobs through the development of new technology companies focusing primarily on renewable energy and environmental advances in St. Lawrence County, New York (USA). Our Qualified Business Development Firms work with start-up companies to secure $2 in private investment for each $1 provided by SPEC. At what stage of investment does SPEC enter the picture? SPEC makes early stage investments in promising companies. Its investments precede venture capital and conventional financing.
Does SPEC co-invest with other financial organizations? SPEC s investments are made only made in cooperation with other early stage private investors on a $1:$2 basis. Are follow-on investments possible? SPEC cannot invest more than $1 million in any single enterprise. But follow-on investments are possible, provided that SPEC s initial investment was less than $1 million. How will SPEC be involved with my company after an investment is made? SPEC is a passive investor. SPEC contracts with a Qualified Business Development Firm that will be responsible for matching its funds at a $1 : $2 ratio with private investment capital and will work with you to define the business strategy and exercise oversight and/or control of certain business operations. If I meet the criteria, what do I need to do first? Entrepreneurs with great new technology ideas who meet SPEC s investment criteria should first answer the questions found on the Submissions page to decide if you should proceed. If you can answer yes to all three questions, you next need to contact one of our Qualified Business Development Firms. Currently SPEC has contracted with the following Qualified Business Development Firms: Golden Technology Management, LLC. North Bay Technology Development When contacting the Qualified Business Development Firm, you should be prepared to submit a concise, complete and compelling business plan that meets the criteria addressed under the Contact section of the Submission page. How long until I know that SPEC will invest in my technology and its associated business? SPEC s approval should not take more than 21 days from the day that one of its Qualified Business Development Firms has forwarded a complete package of documentation to SPEC. However, the discussions and negotiations among the entrepreneur, the possible private investors, and the Qualified Business Development Firm have no timelines other than those set by they themselves and the nature of the project. What and who is involved in the approval process for an investment? SPEC s approval of its portion of an investment is made by the SPEC Board of Trustees 10 people, most of whom have residences and business offices in St. Lawrence County. What is a Qualified Business Development Firm? Why am I not just dealing directly with SPEC? SPEC provides oversight for the funds but does not develop the technology or the businesses in which it invests. It contracts with Qualified Business Development Firms who provide important guidance during the critical early stages of startup, as well as bring private cash to match SPEC s investment at a ratio of $2 for every $1 of SPEC funds. Information in this document current as of 3/21/2008.