(a) The trustees of the Venture Capital Investment Trust may accept moneys and funds for the Arkansas Risk Capital Matching Fund from any source.

(b) Moneys and funds received by the trustees of the trust for the fund shall be dedicated and used solely as authorized in this subchapter.

(c)

(1) Moneys and funds received by the Arkansas Development Finance Authority or the Arkansas Economic Development Commission designated for use or ownership by the fund shall be deposited to the trust and held in the Technology Validation Account and the Enterprise Development Account of the fund, as applicable and as specified in this subchapter, until used for the purposes of this subchapter.

(2)

(A) Moneys deposited to the trust for the purposes of providing financial assistance to technology-based enterprises under this subchapter shall be allocated between the Technology Validation Account and the Enterprise Development Account according to a ratio recommended by the private sector advisory committee and approved by the trustees of the trust from time to time.

(B) Until a different ratio is approved by the trustees, moneys shall be allocated as follows:

(i) Seventy-five percent (75%) of the moneys shall be allocated to the Enterprise Development Account; and

(ii) Twenty-five percent (25%) of the moneys shall be allocated to the Technology Validation Account.

(d) The trustees of the trust will establish separate accounting and tracking and will be responsible for administering the moneys in the Enterprise Development Account and the Technology Validation Account.

(e) Proceeds received by the trust as a return on or in full or partial liquidation of any investments made from either the Enterprise Development Account or the Technology Validation Account, subject to § 15-5-1607, shall be restricted in their use and dedicated and retained in either the Enterprise Development Account or the Technology Development Account or allocated between those accounts, as recommended by the private sector advisory committee and approved by the trustees of the trust and not commingled with other moneys held by the trust, and such proceeds may be used and reused from time to time for the purposes specified for moneys held in such accounts as provided by this subchapter.

(f) Moneys shall be withdrawn from either the Enterprise Development Account or the Technology Validation Account, as appropriate, upon requisition from the trustees of the trust for achieving the purposes of this subchapter.

(g) (1) Moneys and funds within the Technology Validation Account shall be used within the parameters expressed in this subsection for the purpose of assisting very early stage technology-based enterprises in developing or achieving one (1) or more of the following:

(A) A sound business plan;

(B) Market research;

(C) Marketing plans;

(D) Software or hardware and equipment relating to the particular technology or technologies on which the technology-based enterprise is being built;

(E) Development of laboratory, preclinical, or other testing procedures and results;

(F) Attaining proof of concept;

(G) Building of experimental or pilot-scale models of products or facilities; or

(H) Achieving other similar milestones required for the advancement of very early-stage technology-based enterprises as approved by the review committee.

(2) Financial assistance provided from the Technology Validation Account may be made in the form of equity capital or near-equity capital, as approved by the review committee.

(3) Financial assistance made from the Technology Validation Account may but shall not be required to be structured or approved based on a market rate-based rate of return or other benchmark rate of return expected to be achieved with respect to an investment, it being the primary purpose of investments made from the Technology Validation Account, within the reasonable discretion of the review committee, to assist in validating the technology or technologies on which these technology-based enterprises rely or are based, so that such technology-based enterprises may be better enabled to attract additional investments by angel investors or other investors.

(4) Financial assistance made from the Technology Validation Account shall be required to be matched by a contribution of equity capital or near-equity capital, or other sources of funds as set forth in this section, in some proportion as determined by the review committee on a case-by-case basis or as a matter of rule, but on not less than a one-to-nine (1:9) basis with not less than one dollar ($1.00) from the applicant technology-based enterprise for every nine dollars ($9.00) from the Technology Validation Account, from:

(A) One (1) or more owners of any technology-based enterprise receiving financial assistance from the fund;

(B) Proceeds of state or federal research grants, including without limitation federal Small Business Innovation Research grants, Small Business Technology Transfer Program grants, United States Department of Defense research grants, National Institutes of Health research grants, or from any successor programs or agency grants; or

(C) Community-based investment sources.

(5) Any technology-based enterprise receiving financial assistance to be disbursed from the Technology Validation Account shall have a business valuation as represented by the technology-based enterprise and approved by the review committee of not more than two million dollars ($2,000,000) determined prior to the making of the investment from the Technology Validation Account and as the maximum valuation may be adjusted from year to year by the review committee to take into account the effects of inflation.

(6) The maximum investment that may be made to any one (1) technology-based enterprise from the Technology Validation Account shall be one hundred thousand dollars ($100,000), as may be adjusted from year to year by the review committee to take into account the effects of inflation.

(h)

(1) Moneys and funds within the Enterprise Development Account shall be used within the parameters expressed in this subsection for the purpose of assisting early-stage technology-based enterprises in augmenting the investments made or proposed to be made in early-stage technology-based enterprises from accredited investors or owners of the applicant technology-based enterprise, or both, when established milestones for further development of early-stage technology-based enterprises are set forth in a business plan to be approved by the review committee.

(2) Financial assistance provided from the Enterprise Development Account may be made in the form of equity capital or near-equity capital, as approved by the review committee, and shall be on substantially the same terms and conditions as other investments proposed to be made by accredited investors or owners of the applicant technology-based enterprise, or both, contemporaneously with the assistance to be provided from the fund.

(3) Financial assistance made from the Enterprise Development Account shall be required to be matched by investments from accredited investors, owners of the applicant technology-based enterprise, or both accredited investors and owners of the applicant technology-based enterprise in the proportion determined by the review committee on a case-by-case basis or as a matter of rule, but on not less than a four-to-one (4:1) basis with not less than four dollars ($4.00) from the applicant technology-based enterprise for every one dollar ($1.00) from the Enterprise Development Account.

(4) Any technology-based enterprise receiving financial assistance to be disbursed from the Enterprise Development Account shall have a business valuation as represented by the technology-based enterprise and approved by the review committee of not more than twenty-five million dollars ($25,000,000), determined prior to the making of the investment from the Enterprise Development Account and as the maximum valuation may be adjusted from year to year by the review committee to take into account the effects of inflation.

(5) The maximum investment that may be made to any one (1) technology-based enterprise from the Enterprise Development Account shall be seven hundred fifty thousand dollars ($750,000), as may be adjusted from year to year by the review committee to take into account the effects of inflation.