What does Maryland know about start-ups? More than you might think.
TEDCO, whose biggest backer is the Maryland State Government, ranks among Goldman Sachs and T. Rowe Price in terms of the number of start-ups it has invested in over the past five years, according to data from PitchBook.
TEDCO is the only government-funded corporation that's in the top 10 of most active non-traditional venture capital investors. (Non-traditional VCs are typically large institutional money managers that invest in assets such as public stocks, corporate debt or real estate.) These companies are pouring money into start-ups and are often blamed for the frothy valuations of the so-called unicorns, companies whose valuations top $1 billion.
But TEDCO isn't looking at late-stage investments; instead, it's seeding start-ups. "We can actually help an entrepreneur and a technology go from proof of concept through an A-series venture round," said Rob Rosenbaum, TEDCO's executive director. The vast majority of TEDCO's investments are less than $500,000, and it invests less than $20 million annually.
"Our dollar volume is a fraction of what Goldman Sachs or T. Rowe Price, or some of these other hedge funds might do, but in terms of the number of companies we are starting and helping get off the ground, we are head and shoulders above almost everybody," said Rosenbaum.