Funding Sources
Part A The most popular source of capital for new ventures is private investors; these investors are called angels and are typically people the entrepreneur knows or has met through business acquaintances. Today many angels have joined forces to create large pools of capital called angel networks.
1. Perform research to find at least four (4) angel networks that exist in your state; if your state does not have four networks, then find networks by looking at bordering states. (If you live outside the United States, change “state” to “province” or “region” in the above instructions.)
2. Provide a general description of each angel network, its investment criteria, and the contact information in your response.
Part B Many areas of the United States offer access to venture capital through institutes or organizations established on the campuses of major universities. The university acts as a conduit through which the entrepreneurs and investors are matched and assumes no liability for, nor has any ownership interest in, either the new venture or the investor’s company.
1. Perform research to find one (1) major university offering access to venture capital that is geographically close to you. If you live outside the United States, first perform this research within your country. If none exists, then you should research major universities in the United States.
2. Provide a general description of an institute’s or university’s offering, its investment criteria, and the contact information in your response. Discuss if the institute or organization targets a specific industry.
Part C Many states provide venture capital funds or a loan program to help new and growing ventures.
1. Perform research to find out if your state offers any venture capital funds or loan programs to help new and growing ventures. If your state does not provide this type of funding, investigate and describe a neighboring state’s funding. (If you live outside the United States, change “state” to “province” or “region” in the above instructions.)
2. Provide a general description of your state’s offering, its investment criteria, and the contact information (i.e., address, phone, Web site, etc.) in your response.
Angel networks
ANSWER
Angel networks
There are several angel networks in California. They include Band of Angels, Wharton Alumni Angels, Pipeline Angels, Tech Coast Angels and many more. Band of Angels focuses on companies dealing with high technology and life science that are at their seed stage. The companies have to be in big markets with proprietary technology and strong teams. The Band does not invest in restaurants, funds, retail or real estate. They invest amounts ranging between $300,000 and $750,000. They prefer to invest in companies whose location is California so as to remain actively involved in their portfolio in the early development stages of the investment (Band of Angels, 2020). The Band office is located at 750 Battery Street, 7th floor, San Francisco, CA 94111 and can be contacted through telephone number (650) 695-0400.
Wharton Alumni Angels comprises of alumni of University of Pennsylvania and some non-alumni. These members are senior business executives, entrepreneurs and institutional investors who have a global reach. They invest in technology start-ups in their early stages of development. They are also actively involved in Series A and seed investments, without focus on specific industries (Wharton Alumni Angels, 2020). They can be contacted through this link on their website https://www.whartonalumniangels.com/contact_us.
Tech Coast Angels started in 1997, and invests in innovative companies located in South California. It consists over 400 members who are entrepreneurs, CEOs, venture capitalists, senior executives and other professionals. The members invest and often serve on the boards of these companies to offer mentorship. They invest in a range of industries like consumer products, IT, biotech, internet, media, environmental, software, life sciences and others (Tech Coast Angels, 2020). They can be contacted by email through their website https://www.techcoastangels.com/.
Pipeline Angels started in 2011 and invests in companies of non-binary femme social and women entrepreneurs. They serve as friends and family to these entrepreneurs at the critical development stage of their business (Pipeline Angels, 2020). They can be contacted through their email, info@pipelineangels.com.
Venture capital
Stanford University, located in California, has a Venture Capital Initiative that draws together students, practitioners, staff and faculty of the university to promote and advance teaching and research on venture capital and innovation. The Initiative conducts research, collects high quality data and develops methodologies for teaching that aim at understanding the ecosystem of innovation and venture capital. It also aims at solving problems relevant to researchers, policymakers, entrepreneurs and financiers worldwide. The practitioners and academics brought together by this Initiative help Stanford University to achieve these goals (Stanford Graduate School of Business, 2020). The Initiative can be mailed through 655 Knight Way Stanford, CA 94305-7298, USA or emailed through ilyas1@stanford.edu.
It does not focus on specific industries but issues to do with entrepreneurs, policymakers and investors in general. It holds events on campus, like the Stanford Financing of Innovation Summit held on 29th November 2018 at the Stanford Graduate School of Business, where speakers agreed on the future of innovation (Stanford Financing of Innovation Summit, 2018).
State venture capital and loan programs
The Government of California offers programs for venture capital and loans to fund businesses in California. US Department of Agriculture (USDA) Business & Industry Direct Loan Program offers loan guarantees to individuals or private entities in rural counties. They are offered to non-profit organizations, for-profit businesses, cooperatives, public bodies and federally-recognized tribes. To be eligible for the loan, one must be a citizen or permanent resident of the US. If the borrower is a private entity, they must prove that the funds issued will remain in the US and provide new or existing job opportunities for the rural residents of the US. The maximum term on the loans is 30 years for real estate, the lesser of the useful life and 15 years for machinery and equipment, 7 years for working capital and 3 years for interest-only payments (“California | Rural Development”, 2020). The program’s office is located at Kim Dolbow Vann, State Director 430 G Street #4169. They can be contacted by phone on (530) 792-5800, fax (855) 327-7558 and website https://www.rd.usda.gov/ca.
US Small Business Administration (SBA) provides assistance to Americans who want to start, grow and run their businesses by supporting them in managing them, as well as providing financial and technical support. SBA lends to the borrowers indirectly through its partners such as micro-lending institutions and community development organizations. This way, lenders’ risk is reduced and it is easy for them to access capital, while small businesses find it easier to access loans. To be eligible for the loan, lenders and borrowers have to meet purpose, location, size standards, repayment ability and ownership character requirements. Detailed eligibility requirements are provided by the lenders. Through these programs, it is also possible for exporters to access loans (“US SBA Loans”, 2020). Their website is https://www.sba.gov/funding-programs/loans. For general enquiries, one can contact SBA’s Answer Desk on answerdesk@sba.gov, voice call 800-827-5722 or video call 855-440-4960. Centers in California are at several places including California Small Business Development Center – Los Angeles Regional SBDC – Long Beach (4900 E. Conant Street Building O-2 Suite 108 Office of Economic Development Long Beach, CA 90808).
References
Band of Angels. (2020). Band of Angels. Retrieved 25 July 2020, from https://www.bandangels.com/.
California | Rural Development. Rd.usda.gov. (2020). Retrieved 25 July 2020, from https://www.rd.usda.gov/ca.
Stanford Graduate School of Business. (2020). Overview of Venture Capital Initiative. Retrieved 25 July 2020, from https://www.gsb.stanford.edu/faculty-research/centers-initiatives/vci.
Pipeline Angels: We’re Changing the Face of Angel Investing. Pipeline Angels. (2020). Retrieved 25 July 2020, from https://pipelineangels.com/about-pipeline-angels/.
Stanford Financing of Innovation Summit. Stanford Graduate School of Business. (2018). https://www.gsb.stanford.edu/events/stanford-financing innovation-summit.
Techcoastangels.com. (2020). Tech Coast Angels. https://www.techcoastangels.com/.
Loans. (2020). US SBA Loans. Retrieved 25 July 2020, from https://www.sba.gov/funding- programs/loans.
Wharton Alumni Angels. (2020). Wharton Alumni Angels https://www.whartonalumniangels.com/.
