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Welcome to the Texas Coalition for Capital’s SPECIAL EDITION newsletter. We are a non-profit, statewide coalition of leaders supporting economic development and job creation through long-term access to capital for Texas entrepreneurs and emerging companies.

In each newsletter, we highlight Texas’ emerging investment infrastructure, recent investments, and the spectrum of funding sources available to our small businesses. Texans are pioneers, and the infrastructure we are seeing come to fruition – connecting companies and capital – is no exception.

We are a resource for promising young companies, entrepreneurs, investors, economic developers, and other stakeholders in the deal flow chain. The Texas Coalition for Capital hopes to work with you to keep Texas the most vibrant business climate in the country.

With best regards,

Craig Casselberry, President
Texas Coalition for Capital


Events

2nd Annual TechBA Expo

June 9, 2009
3:00 PM to 7:00 PM

MCC Building
3925 W. Braker Lane

Austin, Texas
Click HERE to learn more.



Key Links

Texas Emerging Technology Fund
http://www.texasone.us

Regional Centers of Innovation and Commercialization

Increased research collaboration between public and private sector entities exists through Regional Centers of Innovation and Commercialization (RCIC).  The eight RCICs serve as the initial point of contact for entities seeking capital from the Texas Emerging Technology Fund (TETF). The RCICs act as the regional agent for the ETF Advisory Committee to identify, evaluate, and submit promising proposals from their respective regions to the TETF Advisory Committee.

For more information, visit your local RCIC.

Texas Life Science Regional Center of Innovation
Central Texas Regional CIC
El Paso/Trans-Pecos Regional CIC
Gulf Coast Regional CIC
North Texas Regional CIC
Rio Grande Regional CIC
South Texas Regional CIC
West Texas Regional CIC



Advisory Board

Chairman, Tom Kowalski
Texas Healthcare & Bioscience Institute
President, Craig Casselberry
Quorum Public Affairs
Dan Matheson
Matheson Law Partners
Jeff Clark
Tech America
Larry Peterson
Texas Lyceum
Pike Powers
Fulbright & Jaworski
Damon Rawie
Advantage Capital Partners
Steven Anderson
West Texas Coalition for Innovation Commercialization
James Arie, Ph.D.
University ot Texas Medical Branch-Galveston
Curt Bilby
Terapio LLC
Susan Davenport
Greater Austin Chamber of Commerce/Central Texas RCIC
Guy Diedrich
Texas A&M University
York Duncan
Texas Research Park Foundation
Michael Dwyer
Azaya Therapeutics Inc.
Sloan Foster
Digital Convergence Initiative
Eric Fox
Lockheed Martin
Fernando Gonzalez
Rio Grande Valley Regional CIC
Neal Iscoe, Ph.D.
University of Texas-Office of Technology Commercialization
Martin Lindenberg
AlphaDEV LLP
Mike Lockerd
North Texas Regional CIC
Andrew Nat
Texas Life Science Regional Center of Innovation
Beto Pallares
El Paso/Trans-Pecos Regional CIC
Jim Poage
Satai Network/South Texas Regional CIC
Brian Hermann
University of Texas Health Science Center San Antonio
Bob Prochnow
Gulf Coast Regional CIC
Terry Schpok
Akin Gump Strauss Hauer & Feld, LLP
Brent Sorrells
TECH Fort Worth
Dennis K. Stone, M.D.
University of Texas Southwestern Medical Center
Mark Ellison
Texas A&M University
Sara Patuel
The University of Texas/TechBA Program
Jacqueline Northcut
BioHouston

$500 Million for Texas Small Businesses

Legislation pending in the Texas Legislature could provide an immediate capital infusion to qualified small Texas companies, at no cost to the state.

The Texas New Markets Small Business Investment Program is intended to leverage federal tax credits, provide economic stimulus for low income and rural communities, unfreeze the tight credit market, and drive hundreds of millions of dollars of capital into small businesses in Texas. From the small business perspective, the involvement of New Markets funds eases bank concerns on credit, allowing access to traditional lending where none existed before.

The Texas New Markets Development Program will make the state more attractive to highly qualified federal New Markets Tax Credit program investors. The Texas program follows the highly successful federal model – and programs adopted in 6 other states – using a financing structure familiar to investors. This federal program was adopted (and now expanded) with bipartisan support and was recently named one of the Harvard Kennedy School’s top 50 innovations in government in 2008.

Community development entities - qualified and regulated by the U.S. Treasury - make equity investments and loans to businesses in low-income communities. The state program uses a seven year approach, to assure patient capital. This capital comes with no cost to the state in the first two years after an investment. Furthermore, if the money is not kept at work in these low-income communities over the seven year period, credits are recaptured back to day-one.

The state incentive will leverage federal credits and private capital, making Texas a more attractive investment ground than other states, thereby encouraging millions of dollars to be invested here at home. The incentive will leverage the federal program and be a magnet for national dollars that lead to greater job creation by investing in new or existing businesses seeking to expand.

The experience in other states has shown that follow-on investment capital of two to three times (2-3x) the original investment often results.

Texas success stories include T&K Machine (Paris, TX), and SensorTran (Austin, TX). See related stories herein.

For more information visit www.KeepTexasAhead.com.


New Markets Investment: T&K Machine (Paris, TX)

New Markets Investment from Advantage Capital Partners: $2M
Total Investment from all sources in funding round: $5.03M

T&K Machine is a manufacturer of highly engineered precision‐machined airframe components and light assemblies for the commercial and military aerospace markets. The company produces a wide range of structural and airframe components, such as door latches and parts for wing boxes and cargo boxes. T&K serves some of the leading original equipment managers (OEMs) and Tier 1 aerospace suppliers including Spirit AeroSystems, Goodrich Corporation, Boeing and Vought Aircraft.

The 2007 NMTC investment made in conjunction with additional funding enabled T&K Machine to purchase new manufacturing equipment, restructure debt, and create and/or retain approximately 55 well‐paying jobs with full benefits. Financing also enabled management team members to purchase ownership in the company.

T&K is located in Lamar County, a “Strategic Investment Area” county in northeastern Texas, close to the Oklahoma border. Additionally, the region is a federally qualified “Distressed Area” and “Hot Zone.”

The company fosters job opportunities for low‐income and unemployed persons through collaborative relationships with Texas Workforce Centers. The one‐month long program targets both high school graduates and out‐of‐work hourly laborers for high‐speed, precision machining. Participants spend two weeks of half‐day classroom oriented curriculum (developed by T&K) and half‐day in the T&K manufacturing setting for live demonstrations; at the conclusion of the two weeks, participants then spend two weeks of full‐day apprenticeship on the T&K manufacturing floor. To date, 45% of those starting the program have graduated, with 14 securing full‐time employment with T&K.

To read more about T&K Machine, visit www.tkparis.com.

 

What Others Say about New Markets...

“Our company is able to keep jobs in our community, grow the tax base here and reach out to other countries and cultures with our unique product, because of the New Markets program. We are certainly glad this program is in place.”

Mike Wells, CEO of Louisiana Elastomer, LLC
$6.5 million, Louisiana New Markets Development program
State-of-the-art rubber recycling plant in Vidalia, Louisiana


"I thank my House and Senate colleagues for passing this important legislation that will sustain and bring new economic opportunities to our state.” With double-digit unemployment in my district alone, this legislation will be a significant way to positively change the direction of Florida’s ailing economy.”

Florida state Rep. Will Weatherford (R-Wesley Chapel)


“Without the New Markets program, our company would not be able to expand. We are producing a carbon black alternative using a unique “green” technology and we expect to be very successful. We qualified for this funding because of our location and other factors, and it has been extremely helpful in allowing us make this dream a reality.”

Ray Riek, CEO of Carbolytic Materials Company
$12.4 million, Missouri New Markets Development program
Carbon black alternative manufacturer in Maryville, Missouri