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MARYLAND Fast Facts

• Population (2006): 5,615,727
• Largest Cities (2006): Baltimore, 631,366; Frederick, 58,882; Rockville, 59,114; Gaithersburg, 57,934; Bowie, 53,325
• Targeted Industries: Advanced technology, information assurance (information security and signals intelligence), aerospace and defense (electronics, communications, and control systems), biosciences, pharmaceutics/therapeutics (drug discovery and delivery), medical devices and diagnostics, biodefense (vaccines and biosensors), finance and insurance, and manufacturing and distribution

• Key Incentives: Biotechnology Investment Tax Credit Program, Research and Development Tax Credit, Brownfields Tax Incentive, Procurement Technical Assistance Program, One Maryland Program

MARYLAND State Incentives

Businesses can qualify for up to $5.5 million in tax credits under the One Maryland Tax Credit Program. Businesses that invest in an economic development project in any one of eight "qualified distressed counties" may qualify for project tax credits of up to $5 million and start-up tax credits of up to $500,000.

The Maryland Venture Fund, started in 1994, is a state-funded seed and early-stage equity fund that makes direct investments in technology and life science companies and indirect investments in venture capital funds. It is an evergreen fund and receives annual allocations from the Maryland State Legislature. Approximately 60% of the fund is invested in technology companies in the areas of software, communications, and IT security, and 40% is invested in life sciences companies in the areas of therapeutics, medical devices, and diagnostics. The fund has invested as a limited partner in a total of nine venture funds since 1994.

The Challenge Investment Program (CIP) makes small, high-risk investments in start-up firms. A company can receive up to $150,000, with a typical initial investment averaging $50,000. Incremental investments are awarded based upon the company's performance and ability to achieve milestones set by the Maryland Department of Business & Economic Development. CIP funds can be used to help offset the costs of final testing and market development. In return for its investment, the state receives a royalty payment tied to the achievement of certain thresholds or revenues and capital structure. The state's funds must be matched on a 1:1 basis.

The Enterprise Investment Fund (EIF) makes direct equity investments in emerging high-technology companies. EIF investments, which range from $150,000 to $500,000, can be used for start-up costs including recruiting and hiring staff, operating costs, capital equipment, and R&D. The state's funds must be matched on a 3:1 basis by private sector venture capital funds. Based on the minimum matching requirements, Maryland's investments have leveraged at least $54 million, but in reality, the companies the State has invested in have raised in excess of $300 million in private capital.

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