Two new startup funding opportunities coming to Johnson County
One of the most significant challenges startups face in Iowa is the access to timely and supportive capital. In an effort to help grow the startup ecosystem in the Iowa City area, ICAD, with support from the University of Iowa and community partners, is working to create two new methods by which the community can support interstate commerce startups. Through these new initiatives, community members and organizations will have the potential to help create jobs and wealth in our communities.
The first initiative, which is believed to be a first-in-the-nation approach, is to collaborate with our community foundation, the Community Foundation of Johnson County, to create a new charitable giving fund. This fund would enable the community to make small forgivable loans to help scalable interstate commerce startups meet their match requirements for Iowa Economic Development Authority (IEDA) funding options such as the Proof of Commercial Relevance Program and the Demonstration Fund. These funding programs, managed by Venture Net Iowa, do high-quality due diligence and review on Iowa Startups. When a company receives notice of an IEDA award after this process, they will then be eligible to apply for this local match funding program to accelerate their growth with support from the local community.
“Gifts made to this fund demonstrate our community’s commitment to growing and supporting business development opportunities in our area,” said Shelly Maharry, Executive Director of the Community Foundation of Johnson County. “When we support our local entrepreneurs, we’re making an investment in our future. These entrepreneurs will grow jobs here, raise their families, serve on nonprofit boards, and give charitably to causes they care about. It’s a win – win all around.”
The second initiative is targeted towards ventures further along in their growth. This initiative, a new local Johnson County Seed fund, is currently being developed with the goal of launching in Summer of 2020. This Seed Fund was modeled after the success and longevity of the Ames Seed Capital Fund. This new fund will be a standalone entity operated by a board of managers with administrative and management support provided by ICAD. Local Investors will be able to pledge between $50,000-$250,000 in investment capital with the goal of the first fund having between $2-4M available for investments in scalable companies with a path to exit.
“We are very excited about the work being done to increase the availability of capital for regional entrepreneurs. It will provide much needed early stage funding and demonstrate the community’s commitment to building a vibrant entrepreneurial ecosystem where entrepreneurs can launch and build their companies right here,” said David K. Hensley, Executive Director of the John Pappajohn Entrepreneurial Center and Clinical Professor, Management & Entrepreneurship Department in the Tippie College of Business.