Dayton Working on Plans for New Mezzanine Financing Fund

The National Center for Industrial Competitiveness (NCIC), a Dayton area venture capital firm, is working to launch a $45 million fund that officials say would fill a void in local corporate financing.

The NCIC CapitalFund II SBIC (Small Business Investment Company) would target companies that need what's called mezzanine funding, which gives entrepreneurs high-interest loans and gives investors the option to buy a small piece of ownership, said Frank Winslow, president and chief executive officer of NCIC.

The returns for mezzanine investors, in the 15 to 20 percent range, are less than their more-popular venture capital cousins, 30 percent to 50 percent and up, because the risk is less with more established companies that would take mezzanine loans. Many believe that the more conservative fund should be attractive to investors--many of whom still may be stinging after investing in overvalued tech companies the late 1990s.

Good move Dayton!

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