Montana Board of Investments Information

Board establishes minimum criteria for applicants, including investment staff. Board develops application process and solicits applications. Board selects one or more applicants based on pre-determined criteria. Board sets maximum management fees.Board sets maximum percentage of Board investment.Board sets minimum financial contribution of company owners.Board sets the maximum initial draw amount. Remainder of draw based on venture capital investments completed. Board determines whether venture capital investments are limited to Montana. Debenture term would be seven to ten years or as outlined below*. Compound interest rates set based on risk and absence of equity upside. Maximum aggregate amount for debenture investment is 1.0 percent of the Trust. *The MSTA debentures require total payment of principal and compound interest at the end of the 10-year term. Debt investments in venture capital companies structured in this way would require careful planning on the part of the companies to ensure that adequate liquidity is available at the end of the term to repay both principal and interest. This end-of-term payback structure would likely require the company to build up a large cash position towards the end of the debenture term. Another alternative would be to accept distributions at the same time and rate as the equity partners and apply the distribution against principal. This approach may also reduce the risk as principal is paid down prior to the end of the term. The Board chose to take no action on Venture Capital Investments from Permanent Coal Tax Trust Fund at this time.