Delaware Early-Stage VC Fund Program

The Delaware Division of Small Business is seeking proposals from qualified venture capital funds to participate in the Delaware Early-Stage VC Fund Program, which will leverage approximately $30 million in U.S. Treasury State Small Business Credit Initiative (SSBCI) funds to support high-impact startup companies. The primary objectives include strengthening Delaware's venture capital ecosystem, increasing deal flow for new technologies, and expanding access for underrepresented founders. Proposals are due by May 31, 2023, with an expected award decision in August 2023. Selected fund management service providers will be responsible for establishing the Fund's legal and organizational structure, developing investment strategies, conducting outreach, managing investment evaluation and selection processes, and providing oversight and compliance reporting. Key evaluation criteria include demonstrated experience providing equity investments to early-stage companies, a proven track record of investments in underrepresented demographics or geographies, and the ability to comply with all SSBCI program requirements. The program targets funding rounds ranging from $500,000 to $5 million, typically syndicated with other investors.

The procurement is open to higher education institutions, non-profit organizations, and private venture funds, with a requirement that primary service providers have an established business presence in Delaware. The State may select multiple vendors and expects non-profit funds to be considered part of the private sector match when used for company investments. While there is a preference for investments in Delaware's key industry sectors, other sectors may be considered at the State's discretion. Successful applicants must demonstrate the ability to raise additional administrative funds, as SSBCI funds are primarily intended for investments rather than operational expenses. The State reserves the right to award the contract to the most advantageous proposal, not necessarily the lowest cost. Specific set-aside designations for disadvantaged enterprises are not explicitly detailed in the procurement documents. The program aims to create a sustainable venture capital ecosystem that supports Delaware-based companies, with the State expecting returns to be managed according to the terms of the eventual contract, though not structured as a traditional revolving fund.