Equity Investments

Start-up companies that succeed are beating long odds. More will fail in the first five years than will succeed.

Entrepreneurs in East Kentucky face additional challenges because more than 80 percent of venture capital is invested on the East or West Coast. Moreover, technical assistance outside of large metropolitan areas is often limited or cost prohibitive.

That means financing and technical assistance—two essential components for a successful start-up company—are often the most elusive, particularly in a state such as Kentucky.

But Kentucky Highlands Investment Corporation is the exception to that trend. In 35 years, Kentucky Highlands has helped 220 businesses finance $178 million and create more than 9,900 jobs.

Through its philosophy of providing comprehensive financial and technical assistance and a $40 million venture capital fund, Kentucky Highlands-invested companies have beaten the odds. Kentucky Highlands offer more than money:

• Kentucky Highlands staff has more than 175 years of management and financial experience;
• Expert technical assistance is provided at every step to ensure that the business plan is sound; and
• Kentucky Highlands can tap into necessary resources through partnerships with local, regional and national banks; venture capitalists; economic development associations; local, state and federal agencies.

Kentucky Highlands Investment Corporation staff has the expertise and access to resources that can't be found anywhere else in rural Kentucky.

KHIC has recently teamed with Technology 20/20, located in Oak Ridge Tennessee to form a new equity fund.

The Southern Appalachian Fund (SAF) is a $12.5 M venture capital fund formed to provide equity capital and operational assistance to qualifiying businesses in Southern Appalachia. The Fund's mission is to generate market-rate returns for its investors while promoting shared and sustainable economic development throughout its target region. The Fund's investors include a number of institutional investors ($5M) and the United States Small Business Administration ($7.5M).

Meritus Ventures, L.P. (Meritus) is a $36M venture capital fund formed to make equity investments primarily in private, expansion-stage companies in predominantly rural areas in central and southern Appalachia. In addition, Meritus can provide operational assistance to portfolio companies and prospective portfolio companies. The Fund focuses specifically on companies in Arkansas, Kentucky and Tennessee, and the Appalachian counties of Ohio, West Virginia, Virginia, North Carolina, South Carolina, Georgia, Alabama, and Mississippi.