South Dakota Ag Connection - South Dakota Equity Partners Holds First Closing of Fund

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South Dakota Equity Partners Holds First Closing of Fund
South Dakota Ag Connection - 07/19/2018

Early and growth stage companies in South Dakota now have access to additional equity capital as South Dakota Equity Partners (SDEP), a public-private partnership supported by the Governor's Office of Economic Development (GOED), has raised $16.9 million according to Gov. Dennis Daugaard.

"SDEP had its initial closing at the end of June, which means it is ready to start investing in a variety of projects, primarily in research commercialization and knowledge-based companies," the Governor said. "SDEP's long-term goal is to diversify the portfolio across industries and with companies needing equity capital to facilitate their growth capacity as they move through their business life cycle stages."

Daugaard added that the need for such a fund was first discussed nearly seven years ago. "At that time, we made a commitment to find a way to address the limited equity capital available for these types of companies in South Dakota. This fund will go a long way toward filling that financing gap. This is just one more tool in our economic development toolbox," he said. He explained that the process took several years because the group needed to make sure the right mix of experienced investment professionals was involved.

Blaine Crissman, partner of SDEP, said SDEP won't be letting up on its fundraising efforts anytime soon. "We're a little more than half way to the goal of $30 million, and I am optimistic that we'll get there. South Dakota has a strong economy, and we look forward to investing this capital in growing companies across the state."

SDEP, governed by an independent board, will only invest in companies in South Dakota. Initial capital for the fund came from a number of private institutions and individual investors, as well as a one-time state grant. All investment decisions will be made independently, without state input. In addition to the equity investment, the partners of SDEP, on behalf of the fund's investors, will work collaboratively with the management teams and employees of its portfolio companies to grow the businesses and positively impact economic development in South Dakota. Any returns on equity investments as a result of the state's grant will be reinvested in future equity funds to support additional projects; the funds will not return to the state.

In addition to the private investors in SDEP, several of the state's local economic development corporations also chose to invest funds in support of SDEP's mission. "Yankton Area Progressive Growth (YAPG) has seen the value in public-private partnerships on a number of projects, and the opportunity with SD Equity Partners could take Yankton to the next level" said Nancy Wenande, CEO, YAPG. "The collaborative investment efforts across South Dakota show there is a long-term commitment to develop thriving communities that include business diversity."

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