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The Kentucky New Energy Venture Fund (KNEV) supports the development and commercialization of alternative fuel and renewable energy products, processes, and services in Kentucky. The goals of KNEV are to grow alternative fuel and renewable energy companies in Kentucky, to stimulate private investment in these companies, establish an alternative fuel and renewable energy industrial knowledge base in Kentucky, and to develop a support network for individuals and companies operating in this industry. KNEV will provide support to companies developing and commercializing products in the following areas: Alternative transportation fuels produced from coal, waste coal, or biomass or extract oil from oil shale to power vehicles, aircraft, and machinery, Synthetic natural gas produced from coal through gasification processes Biodiesel Ethanol produced from food crops or cellulosic ethanol Any other fuel that is produced from a renewable or sustainable source Applicants must be able to demonstrate their ability to develop and lead a commercially successful venture. Companies seeking capital go through a rigorous due diligence process and are judged in terms of industry fit, return on investment and economic development goals.
Kentucky-based companies who are "Active" and "Good Standing" with the Kentucky Secretary of State. Companies must have a unique and competitive product, technology, or process that can be protected in the commercial marketplace. Applicants must demonstrate the commercial viability of their technology and must demonstrate their ability to develop and lead a commercially successful venture. Investments can only be made in a company organized as a C Corp. or as an LLC.
KNEV will provide grants and investments. Funds are to be used to support the operations of the company that advance the development and commercialization of the company's product and that increase the valuation of the company. Funds may NOT be used for real estate development projects. The company must complete all milestones and be good standing to continue to receive funding. Grants can be awarded up to $30,000. Companies may not receive grants in excess of $30,000 or more than one grant. Any funding requested above $30,000 will be via an investment.
Companies must match the fund's investment on a one-to-one (1:1) dollar ratio. Grantees can match KNEV's funding in cash or in-kind sources (at KNEV's discretion). Investees must match KNEV funding in cash through either a stand-alone investment or through a qualified financing. In order for funds to be considered matching for KNEV, the matching financing must be closed no more than six months before the application or within six months after an investment notice. Matching funds cannot be comprised of funds from KSTC or the Commonwealth of Kentucky.
KSTC does not take ownership of the technology; the company retains ownership. If the company does not own the technology used in the project, the applicant must provide documentation stating its right to utilize or further develop that technology prior to receiving any award.
There are no payback requirements for grants. However, the award may become subject to payback as a condition of future awards as mentioned below. KNEV investments must be matched 1:1 in cash. Investments are invested via a standalone convertible note or as part of a qualified round of financing. If matching funds are provided by the company or "friends and family", the investment will be via a convertible note. If matching funds are provided by independent investors, then KNEV will invest according to the terms of the round. If the company applies for and receives KNEV funding beyond the grant, KSTC will negotiate a payback provision for the full amount of all awards made.