The Iowa City Area Development Group on Tuesday announced two new seed funding methods it will begin offering to support interstate commerce start-ups, in partnership with the Community Foundation of Johnson County and the University of Iowa.
One initiative is a charitable giving fund, which grants small forgivable loans to start-ups so they can meet local match requirements for Iowa Economic Development Authority programs such as its Proof of Commercial Relevance program and Demonstration Fund.
Start-ups will be eligible to apply for the local match from the charitable giving fund — which ICAD believes to be the first of its kind nationwide — after receiving notice of an IEDA award, and following a due diligence process.
“When we support our local entrepreneurs, we’re making an investment in our future,” said Shelly Maharry, executive director of the Community Foundation of Johnson County. “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.”
Another funding option, a local Johnson County Seed fund, is being developed as a stand-alone entity, with a board of managers and support from ICAD. It is anticipated to launch next summer.
The entity will seek $2 million to $4 million — in $50,000 to $250,000 pledges from local investors — to invest 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, said David Hensley, executive director of the John Pappajohn Entrepreneurial Center at the University of Iowa.
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“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.”
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