Startup businesses require new capital. Debt funding is repaid to the lender, generally with interest, and equity investments are for those ventures with the highest growth potential. Forbes estimates that 99.3% of new businesses will not receive equity investment.Below we list a range of resources for Richmond entrepreneurs:
Access To Capital
These resources provide a good overview of the common funding sources when starting a business:
o Bootstrapping - using your own money
o Crowdfunding - attracting individuals online to lend or invest
o Debt – borrowing from traditional lenders
o Equity – selling a portion of your business
o Pitch Awards – winning money based on the quality of your concept
Kiva creates access to new capital for entrepreneurs, globally. They enable financially excluded and socially impactful entrepreneurs to access small business loans. Kiva reinserts relationships into the financial system by facilitating lending through an online community of over 70,000 potential customers, business advisors, and brand ambassadors. Some of the highlights:
o 83 countries
o $709 million lent
o 10 years in business
o 1.5 million people have made a loan
o 97.1% repayment rate
Kiva loans are made at 0% interest and no fees. With terms of up to 36 months, first time borrowers can access up to $10,000. New borrowers complete an application, receive support from their personal network, and then from the public. 90% of borrowers successfully complete their crowdraise.
Alumni of the Startup Works with WIBO™ program, who complete their private fundraising period,qualify for a loan from RVA Works on Kiva. This is made possible through a grant from the Department of Housing & Community Development.
For more information: https://www.kiva.org/
The LoanSpot program connects entrepreneurs to financial and business assistance to help them start, manage, and grow their enterprises. It is a partnership between the Virginia Community Economic Network and Accion US, the nation’s largest nonprofit microlender. Leveraging Accion’s innovative online lending platform with VCEN’s robust statewide small business provider network, LoanSpot connects small business owners to additional sources of capital and credit. LoanSpot serves as a pipeline for qualified referrals to Accion – Accion makes the lending decisions according to their criteria while VCEN serves as a “relationship broker” connecting service providers to Accion and promoting new lending opportunities to Virginia’s small business community.
Conaway Haskins III
(804) 344-5484 x 124
In partnership with the Richmond EDA the city provides several loan programs and other business incentives to assist entrepreneurs as they establish and grow their business, including: the Mayor’s Opportunity Fund,Enterprise Zone Program, Tax Abatement Incentive Program, Commercial Area Revitalization Effort (CARE), Citywide Revolving Loan Program, Contractor Assistance Loan Program, and the Arts & Cultural District Micro-Enterprise Revolving Loan Program.
The Virginia Small Business Financing Authority administers and facilitates loans to either launch or expand the following: small businesses, existing businesses in need of short-term financing, minority-owned businesses, Virginia’s tourism industry, licensed child care centers and family-home providers,environmentally-friendly equipment or structures, and small manufacturers and non-profit organizations. Approximately 20% of the Authority’s capital commitments are to new ventures.
LISC is a national nonprofit that builds strong communities by providing residents and community partners with the resources and technical assistance needed to transform distressed neighborhoods into great places to live,work, and raise families. Virginia LISC supports neighborhood small business development through the Church Hill SEED Entrepreneurship Program, small business lending and technical assistance.
With offices in Christiansburg, Richmond, and Springfield, Virginia Community Capital (VCC) is dedicated to the prospect of building wealth for all through our lending, deposits, and advisory services. As a community development financial institution (CDFI), our mission is to offer innovative, flexible financial products designed to support housing and community development ventures,increase jobs, and encourage sustainable communities. In partnership with our for-profit bank, Community Capital Bank of Virginia (CCB), the non-profit VCC offers loan capital broader and more flexible than bank lending in low-to-moderate income communities in underserved geographies and markets.
CIT GAP Funds is a family of seed- and early-stage investment funds placing near-equity and equity investments in Virginia-based technology, life science, and clean tech companies. CIT GAP Funds invests in companies with a high potential for achieving rapid growth and generating significant economic return for entrepreneurs, co-investors and the Commonwealth of Virginia.
HVP identifies and invests in emerging companies with high growth potential. The group invests in seasoned entrepreneurs building early growth stage companies with defensible positions in large and growing markets. HVP typically invests $500,000 to $4 million initially, and continues to invest and build value through the growth of portfolio companies. HVP typically seeks board representation in investments; and provides constructive, strategic, operating and networking support to the portfolio companies.
The NDA is a group of investors who help to capitalize early-stage Virginia based companies. NDA seeks to help the communities and the economy of Virginia by bringing new services to the market and by supporting start-up businesses in both financial and non-financial ways.
New Richmond Ventures unique investor network approach allows them to raise the right amount of capital at the right time, whether that is seed investments for ventures in launch mode or leading larger Series A or B rounds for those in scale mode. Their intent and capacity is to be supportive funding partners for the portfolio companies until institutional and/or strategic investors are ready to take the ventures to the next level.
SJF Ventures is a growth-stage venture capital fund headquartered in the Southeast. Through its investment funds, the firm provides equity financings from $1MM to $10MM, solo or in syndicates, to companies seeking growth capital. SJF Ventures focuses on the resource efficiency, sustainability and technology-enhanced services sectors. Representative investment areas include efficiency and infrastructure, asset recovery including reuse and recycling,sustainable agriculture and food safety, health and wellness technology, education technology and digital media and marketing services.
Virginia Capital has a private equity group that invests in the range of $500,000 to $10 million into growing companies in the South Atlantic region.Virginia Capital Partners prides itself in aiding businesses in industries such as healthcare, media, communications and insurance.
For issuers and intermediaries, Wealthforge has created a single integrated solution to execute and manage the process of raising capital, from thorough compliance reviews, to data-rich dashboards that allow complete transparency into every aspect of the process. For investors, they have made it simpler and easier to invest in ideas with potential.
o Bon Secours SEED Grant Program for East End Businesses: http://community-wealth.org/
o Business Planning for Lenders: https://www.sba.gov/starting-business/write-your-business-plan
o Preparing for Equity Investors: http://venturehacks.com/pitching
o The Lean Startup: http://theleanstartup.com/
o How Equity Funding Works: http://fundersandfounders.com/how-funding-works-splitting-equity/
o Finding Angel Investors: https://angel.co/