The Download: Horizon Technology Finance ramping up venture debt deals in Washington region

August 11, 2013

It’s been nearly a year since Horizon Technology Finance opened an office in the Washington region to provide venture debt financing to young companies in the Mid-Atlantic.

In that time, companies in the region have come to make up roughly 10 percent of its portfolio, a figure executives said should grow as they continue to hunt for investments.

Earlier this month, the firm led a $6 million venture loan for Ekahau, a Reston-based company that uses real-time location information to track a company’s inventory, assets and people.

The deal marked Horizon’s sixth in the region. The others include Vienna-based physical security firm VidSys, Reston-based profit analytics company Razorsight, Dulles-based video distributor Grab Media, Columbia-based data management company Lotame Solutions and Reston-based IT manager Netuitive.

Horizon counts 52 portfolio companies nationwide.

Farmington, Conn.-based Horizon hired Todd McDonald last summer to oversee investments in the area. President Jerry Michaud said the firm, which was founded in 2004, has previously invested in the region, but decided there were enough opportunities to open a dedicated satellite office last year.

“We have done deals in that area in the past, but they’ve been referrals or us reaching down there on a one-off basis,” Michaud said. “Having looked at that market pretty closely, there were a lot of opportunities that we didn’t see” until opening an office there.

Michaud said Horizon normally invests in a company after or alongside venture capitalists. Deals typically range from $2 million to $20 million. The benefit to venture debt, he said, is that the money doesn’t dilute the equity of current investors and owners.

“There is a really strong group of venture capitalists that promote companies in that area and fund companies in that area. It’s a relatively small community that we work with,” Michaud said of the Washington region.

Cast your vote

The 10 woman-owned ventures competing for cash prizes in Rockville Economic Development Inc.’s annual StartRight business competition presented their companies before a panel of judges Friday. Winners will be announced Aug. 29.

You can cast a vote for the firm with the most promise on the Capital Business Web site, www.capbiz.biz. The poll will remain open for approximately two weeks and the reader’s choice will receive a special acknowledgement.

Steven Overly covers the business of technology, biotechnology and venture capital in the Washington region for The Washington Post and its weekly Capital Business publication. In that capacity, he has written about start-up struggles, investment trends and major drug discoveries.
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