(20 ILCS 3501/810-25)
Sec. 810-25.
Direct and Co-venture Investments.
An enterprise seeking a
direct investment from the Illinois Venture Investment Fund shall file an
application with the Authority along with an applicable fee to be determined by
the Authority. A valid application shall contain a business plan, including a
description of the enterprise and its management, a statement of the amount,
timing, and projected use of the capital required, a statement concerning the
feasibility of the proposed technology, product, process, or invention, its
state of development and likelihood of commercial success, a statement of the
potential economic impact of the enterprise on the State, including the number,
location, and types of jobs expected to be created, and such other information
as the Authority shall require.
In addition to the foregoing, the Authority shall approve an application for a
direct investment and shall approve a co-venture investment only after it has
made the following findings:
(a) The enterprise has a reasonable chance of success;
(b) If the application is for a direct investment, Authority participation
is
necessary to the success of the enterprise because conventional, private
funding
is unavailable in the traditional capital markets, or because funding has been
offered on terms that would substantially hinder the success of the enterprise;
(c) The technology, product, process, or invention for which the investment
is
being made is feasible, has the potential to achieve commercial success and the
enterprise has the potential to create substantial employment within the State
per dollar invested and that this employment, so far as feasible, may be
expected to be for residents of areas of critical labor surplus;
(d) The entrepreneur, investors, shareholders, and other founders of the
enterprise have already made or are obligated to make a substantial financial
and time commitment to the enterprise;
(e) The securities to be purchased are qualified securities;
(f) The Authority determines that the possible gains on the investment are
at least commensurate with the risk of loss and that there is a reasonable
possibility that the Authority will recoup its investment, within 10 years
after
the investment or such other time period as negotiated by the Authority,
through the receipt of interest payments, dividends, capital gains, or other
distribution of profits, or royalties on investments made by the Authority; and
(g) Binding commitments have been made to the Authority by the enterprise
for
adequate reporting of financial data to the Authority and any participating
professional investors or seed capital investors. The report shall include an
annual audit of the books of the enterprise by an independent certified public
accountant if the Authority so requires. The Authority and any participating
professional investors or seed capital investors shall secure sufficient
contractual rights from the enterprise as the Authority shall consider prudent
to protect the investment of the Authority, including, at the discretion of the
Authority and without limitation, a right of access to financial and other
records of the enterprise.
The Authority's interest in qualified securities from investments shall not
represent more than 49% of the voting stock of any single enterprise at the
time of purchase after giving effect to the conversion of all outstanding
convertible
securities of the enterprise. In the event of severe financial difficulty that
in the judgment of the Authority threatens the investment of the Authority
therein, a greater percentage of those securities may be owned or acquired by
the Authority.
(Source: P.A. 93-205, eff. 1-1-04.)
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