Explaining the “Capital Stack” and Available Funding Alternatives Focus of 3 Steps to StartUp Mar. 23 Webinar
Whether a Mainstreet business, manufacturing firm or research-based entity, companies need funding to further their goals. Where to turn for that funding depends on the specific funding need as well as where your firm stands in its business lifecycle. The bottom line? In most cases, for those businesses with a solid, viable plan, funding options are available.
On March 23, the 3 Steps to StartUp program, an initiative of INNOVA Commercialization Group, WV Jobs Investment Trust and TechConnect West Virginia, held an informative webinar for entrepreneurs across the state explaining West Virginia’s “capital stack” and funding alternatives to a traditional bank loan. To watch a recording of the webinar, click here.
The capital stack refers to the types of capital, or funding, a business may need based on where they are in the development of their enterprise. This can include traditional bank loans as well as alternative funding sources, like microloan funds, Community Development Financial Institutions, public or private venture funds, among other options.
The 3 Steps webinar highlighted five such “alternative lenders” and outlined the funding options offered and the types of businesses that may qualify. Event presenters included: Michele O’Connor, WV Jobs Investment Trust; Steve Webb, WV Economic Development Authority; Tim James, First Microloan of West Virginia; Kevin O’Connor, Partner Community Capital; Brad Sergent, WV Jobs Investment Trust; and, Mike Green, Mountain State Capital.
First Microloan of West Virginia: Intermediary lender for the U.S. Small Business Administration offering a microloan program for small businesses. The program can loan up to $50,000 for small assets, working capital, inventory, and equipment. The group works with businesses that aren’t “bank ready,” to include restaurants.
WV Economic Development Authority: State agency that provides financial loans to growing companies in the manufacturing, technology and other industries targeted by the West Virginia Department of Economic Development. Loans can range from $50,000 to $10 million and can be used for real estate/buildings and fixed machinery/equipment.
Partner Community Capital: A 501(c)(3) non-profit Community Development Financial Institution that works with businesses, non-profit organizations, farms, and projects that sustain small, locally owned enterprises and their owners, provides opportunity for disadvantaged groups, and lessens impact on natural resources. Lending available from $5,000 to $1 million. The organization provides access to capital to borrowers who cannot meet the credit standards of traditional financial institutions.
WV Jobs Investment Trust: State of West Virginia’s public venture capital fund that provides equity, debt and/or hybrid financing. Job creation is a primary criteria for investment. Does not invest in Mainstreet businesses, real estate, or equipment. Typical deals range from $250,000-$1 million and the organization is typically a minority investor and is not involved in the day-to-day operations of the portfolio companies.
Mountain State Capital: Based in WV and focused on the Appalachian region, Mountain State Capital is a venture capital fund that raises capital from private sector sources (individuals, banks, etc.). Target industries for investment include IT software/hardware, life sciences and fintech, among others, and companies are normally well-established. Investments can range from $200,000-$500,000. The firm normally provides investment in exchange for equity in the company.
These organizations, as well as others working within West Virginia’s capital stack, offer businesses a variety of technical assistance services to help move their concepts forward. From business and marketing plan development to connecting the company with industry peers or assistance providers, these organizations are all mission-focused on helping your business succeed.
For more information, visit the 3 Steps to StartUp website.
About 3 Steps To StartUp
The INNOVA Commercialization Group in collaboration with TechConnect West Virginia and the West Virginia Jobs Investment Trust created the 3 Steps to Start Up Program, which is funded by the Appalachian Regional Commission and the Claude Worthington Benedum Foundation through a federal POWER (Partnerships for Opportunity and Workforce and Economic Revitalization) grant. To learn more about the 3 Steps to StartUp Program, or to apply, visit http://3steps2startup.com/.