Great news for Kansas City startups—a brand new $5 million pre-seed fund is being established in Kansas City.
The Enterprise Center in Johnson County (ECJC) announced this week that it has secured the Economic Development Administration’s (EDA) Seed Fund Support grant with the cooperation of multiple entrepreneurial support organizations and civic leaders on both sides of the state line.
Here’s what it all means:
Seed capital is critical for entrepreneurs who create, on average, 16,000+ jobs every year. We need to fill the seed capital gap, cited by KCSourceLink’s WeCreate Capital report as a key hindrance to entrepreneurial development in Kansas City.
ECJC will leverage the EDA grant to create an innovative and unique tax-deductible structure to attract seed funding to drive startup activity.
ECJC will seek to raise a $5 million philanthropic pre-seed fund: donors will receive a charitable tax deduction for their investment, rather than a share of returns.
This effort was led by the ECJC and supported by the Midwest Seed Capital Consortium, a cooperative, bistate economic development initiative from KC’s leading entrepreneurship support organizations.
The group expects to begin making investments in qualified early-stage companies in 2018.
>>>>> We just released an update to the We Create Capital report, which includes big news for microloans and equity investments. Read it now.
Kansas City is improving access to capital for early-stage companies
Pre-seed funding ranges from $50,000 to $300,000. In our 2015 We Create Capital report, we identified this as a gap in the Kansas City funding continuum, a lack of opportunity for entrepreneurs still in the idea development and formation stage.
“In launching this pre-seed fund and closing that gap, we are taking an important step towards our civic goal of becoming the most entrepreneurial city in America.”
That’s Melissa Roberts, vice president of communications and outreach at ECJC. “The fact that this project has been undertaken by groups from both sides of the state line goes to show that our regional goals of spurring economic development, driving job creation and improving business dynamism are better served by building bridges than by border wars.”
The Midwest Seed Capital Consortium includes EDJC, the Economic Development Corporation of Kansas City, the OneKCforWomen Alliance, the Kauffman Foundation, the Greater Kansas City Chamber of Commerce and area investors.
ECJC will seek to raise $5 million to capitalize the fund over the coming months. The fund’s founding donor may receive naming rights and a seat on the investment committee. And the fund’s charitable structure ensures that all donors will receive a charitable tax deduction for their donations to the fund.
>>>>> For more information on contributing to the fund, visit the ECJC website.
The fund is expected to begin making investments in the first half of 2018. The new fund will provide support to early-stage entrepreneurs by taking a lead position in investments of up to $150,000 (with 1:1 matching funds required). The program will also require that entrepreneurs receiving investments participate in educational and mentoring programs provided by the ECJC.
Funding opportunity for your Kansas City business
If you’re excited to capitalize (pun intended) on this extraordinary opportunity, be sure to reach out to us ASAP for your personalized action plan so that we can connect you with the resources you need to shore up your plan.
And if you have a strong premise but your pitch needs work, check out these tips from experts in our resource network:
Digital Sandbox pitches require some specific details, but a lot of it is universal to any good pitch:
Start with a wow statement. Distill what you do into a single, scintillating statement that makes people want to learn more. Be clear and use language that is easy to understand.
Share the problem you’re solving (How big is it? Who has it?) and your solution (How do you fix it? Why will people pay for it?)
Explain your go-to-market strategy. How will you acquire customers and achieve a competitive advantage?
Every second of your 3 minutes is precious and a lot more goes into a solid pitch, head to the full blog post to learn more.
Our friends at the UMKC SBTDC offered up some “untips”, things you do NOT want to do at your pitch. Here are a few:
Head to the blog post to learn more, including what you should do the night before your pitch.
When somebody asks, “What does your business do?” you better be ready with a great response. And not just a great response, it should also be quick. No one likes to bore their friends, let alone a panel of judges. This blog post introduces the what, why, now, want model. Here’s just a taste:
What: The skeleton of your entire elevator pitch is a description of what your business does. And if you want your answer to stick, your reply should be manageable for your audience
Why: This is when you really grab your audience’s attention. Your “what” may be pretty boring (e.g., We sell air conditioners...), but your why is when you share why you’re motivated and inspired (...and employ veterans!)
Now: Now is purposefully vague (in fact, you may change this week to week). Basically, it’s your opportunity to give your audience an idea of what you’re up to or excited about right now.
Want: The want of your elevator pitch is your call to action. Chances are if you’re taking the time, energy and enthusiasm to tell someone about your business, you probably want them to think about it again sometime
Head to the blog post to put more meat on these bones
Looking for other funding opportunities?
If you’re looking for startup resources, give us some information in our CapitalMatch funnel and we will help you find your next step and maybe even your next investor.