City College: Pilot Program To Fund High Growth Start-ups In The Region
By Tiffany Rider - Senior Writer
March 12, 2013 - Adding to its menu of economic development programs, Long Beach City College (LBCC) has been granted the opportunity to help launch job-creating, high-growth technology start-ups in the region through an entrepreneurship funding pilot program.
After a successful run of the program at Ohio’s Lorain County Community College, in partnership with the Ewing Marion Kauffman Foundation through the non-profit Innovation Fund America (IFA), LBCC executive vice president of college advancement and economic development, Lou Anne Bynum, said program representatives came to the college for a site visit to see first hand the economic development efforts in Long Beach.
“Kauffman Foundation met with our leadership, spending almost two days learning about what we do and how we do it; how we build a platform for entrepreneurs,” Bynum told the Business Journal. That platform holds the Los Angeles Regional Small Business Development Center Network (SBDC), the Goldman Sachs 10,000 Small Businesses program and a virtual incubation network initiative. “We’ve intentionally built up the economic development side of our practice and our mission for the past 10 years,” she said.
“[Kauffman] then said they would be announcing partners around the country to be involved in the IFA,” Bynum said. “We were one of the sites selected.” The partnership was announced February 2 at the 2013 American Association of Community Colleges’ Workforce Development Institute in San Diego.
As part of the pilot, Kauffman Foundation and Lorain County Community College will provide LBCC with technical assistance to achieve the investment goals of the program fund. “The interesting thing is we are being provided a lot of different technical assistance from Lorain and from Kauffman,” according to Sheneui Weber, executive director of college advancement and economic development for LBCC. “What they are helping us do is set up a sustainable infrastructure for us to raise funding from our community to essentially pay it forward and build and grow the business talent we have here.”
While LBCC is still working out the detailed criteria for program applicants, Weber said they are looking for first-time entrepreneurs who have not yet received an investment from an organization. “They have exhausted their friends, families and those who we call ‘fools,’” Weber said with a laugh. Applicants need to be coachable and willing to be mentored; are located in Long Beach or the greater Los Angeles area (or are willing to relocate); and have a breakthrough idea for new technology with large market and large export potential.
From now through the end of 2014, LBCC hopes to provide three to four $25,000 grants and one $100,000 interest-free loan on a quarterly basis. The interest-free loan would be paid back to replenish the fund. The first cycle of funding should begin this fall, according to Jesse Torres, director of the Los Angeles Regional Small Business Development Center Network based out of LBCC.
“We are focusing on partnership development and raising the money for the fund itself,” Torres said. “It is going to be interesting as a community college doing investment work and also asking people to essentially provide contributions to this fund when they don’t get equity stakes in these companies. Essentially you are contributing because you want to be part of this ecosystem and you want to see businesses thrive. Taking that message to perspective donors is going to be compelling.”
While this seed funding will benefit startups, Torres said the program is not intended to replace other funding sources in the Los Angeles region. “The great thing about the innovation fund is that it is essentially gap funding,” he said. “Most of these business incubators or accelerators look to fund companies at the $100,000 level. They don’t do $25,000 grants. So we can be a pipeline to all of these different venture groups and help them meet their mission. That’s the whole point. You’re not there to compete; you’re there to be part of the ecosystem.”
For more information, e-mail Weber at firstname.lastname@example.org or Torres at email@example.com.