Bluegrass Angels Raises $3 Million for New Investment Fund

LEXINGTON, KY (June 14, 2010) — The Bluegrass Angels (BGA), central Kentucky's first seed funding organization, announced that it has raised $3 million for its second early stage venture capital fund, with the goal to add $2 million at a later date. Investors include Kentucky Technology Inc., Commonwealth Seed Capital LLC and 24 private investors. The BGA, which invests primarily in Kentucky startups with a focus on spin-off companies from University of Kentucky research, has invested in 16 startups since 2004, providing $4.5 million in seed capital that has been leveraged to $30 million in venture funding.

"UK's Von Allmen Center for Entrepreneurship has already presented our new fund with a list of 12 startups in the pipeline for possible investment," said the fund's chairman, Edward D. "Jed" Bullard, who was also chair of the first fund.  "It's important to help keep Kentucky's newest and brightest ideas and idea-makers here in the Commonwealth to assure a healthy economy for future generations. That is a shared value, I believe, of each member of the Bluegrass Angels."  Bullard is chairman at his family-owned safety products manufacturing business, E. D. Bullard Company, based in Cynthiana, Ky.

The new BGA fund, BGAVF II, has attracted both members of the Bluegrass Angels and new investors including UK alumni from Virginia, Georgia, Texas and Kentucky as well as other UK supporters, according to Dick Furst, dean emeritus of the Gatton College of Business and Economics and BGA co-founder, who solicited the new members. "Despite the nationwide downturn in venture fund activities, the BGAVF II investors want to show their support for Dr. Todd's efforts to commercialize UK research and create new companies and new jobs," said Furst. Angel investors provide about 90% of the seed and early stage capital for start-up entrepreneurs according to the Kaufman Foundation.

UK has invested in both of the BGA funds through Kentucky Technology Inc., the university's for-profit corporation headed by Len Heller. Heller was chairman of the first BGA fund before Dr. Todd asked him to lead the new office for Commercialization & Economic Development at the end of 2006. "Our angels not only provide critical seed funding, they also provide invaluable mentoring support and management guidance," said Heller.

Both Heller and Furst applaud the work of CED's Von Allmen Center for Entrepreneurship including the Lexington Innovation & Commercialization Center that provide administrative support to BGA, screening approximately 100 potential investments last year, and fostering relationships with economic development groups in Kentucky and regional angel and venture capital investment groups.

Commonwealth Seed Capital LLC, a program of the Kentucky Cabinet for Economic Development's Department of Commercialization and Innovation, is also a return investor. "By participating in the second Bluegrass Angels fund, the Cabinet for Economic Development, through the CSC fund, is demonstrating our ongoing support of the growing state's entrepreneurial culture," said Deborah Clayton, Cabinet Commissioner and President of CSC. "Many of the innovations we invest in today will become the businesses that will commercialize new technologies and provide high-tech jobs for future generations of Kentuckians."