Called the Ecosystem Partner Grant, it’ll put up to $250,000 to work at non or for-profit North Carolina organizations that are supporting or plan to support high-growth potential entrepreneurship. Criteria includes promoting diversity and collaboration, facilitating capital formation, building and attracting talent and making an impact on promising young companies.
It’s all part of NC IDEA’s expanded mission since it became a private foundation last year. Tax laws require it invest an additional roughly $1 million annually toward its support of high-growth entrepreneurial endeavors that maximize the potential of North Carolinians.
According to Ruhe, who spent seven recent years as director and then vice president of entrepreneurship at the prestigious Ewing Marion Kauffman Foundation, the new grants are an effort to prop up the most promising efforts in the state and help them become successful and sustainable.
“If our region/state likes what an organization is doing and wants them to do more, we have to find more resources for them to do it,” he told me last month. “I want to show the rest of the state that we can help facilitate best practices and therefore be a partner in leveraging resources.”
Ruhe expects the new partner grant program to help NC IDEA inventory the existing organizations contributing to the entrepreneurial ecosystem in North Carolina, in hopes of identifying any gaps and informing future grant making. Though the grants aren’t modeled off of any particular program, Ruhe notes that an increasing number of foundations are funding both non-profits and for-profits, sometimes through equity investments that provide returns to the foundation over time. Kauffman, along with the Knight Foundation and Kellogg Foundation, are examples.
Though equity investments aren’t planned right now, new models and programs will be considered under NC IDEA’s new structure and leadership. The RFP for this program goes live tomorrow.
A decade of grant-making
NC IDEA was founded in Durham in 2005 after a 25-year state initiative to capitalize on computing innovation led to a pool of capital from one chip company’s successful exit. (Here’s the full back story.) The grant program started the following spring to fill a need for pre-venture capital and has since provided $4.2 million to 104 North Carolina companies in information technology, materials science, medical devices or diagnostics and green technologies.
A signature requirement of the grants is that they fund a specific activity or initiative at the company, like patent research and application, app development and launch or a targeted sales and marketing effort. Many companies go on to win further grants, angel funding or institutional capital.
Through two grant solicitations in the late winter and late summer, up to 12 companies are provided approximately $50,000 each every year. In addition, they get access to mentors who often connect them with business partners, customers, talent or investors.
If the new program is anything like the legacy one, then the process is an intense one, and there will be many more applicants than awardees. (For the spring 2016 legacy grant cycle, 173 applications came in for up to six grants.)
Details of the new program
After the new grant application deadline April 18, there will be two months of evaluation and due diligence by NC IDEA’s board, which includes Randy Myer (chair), a professor at the University of North Carolina at Chapel Hill; Sean O’Leary, former CEO and president of StrikeIron; Jeffrey Barber, managing director with Charlotte investment banking firm Fennebresque & Co.; serial entrepreneur Lee Buck; Karen LeVert, CEO of Southeast TechInventures and COO of Ag TechInventures; and Mitch Mumma of Intersouth Partners. They expect to make a decision in July.
From the application, here’s how you are most likely to win a grant. First of all, any ecosystem partner must satisfy the following in order to help further NC IDEA’s mission. It should foster diverse and collaborative community, identify and impact promising companies, facilitate the formation and multiplication of capital, nurture and attract world class talent and foster connectivity both within ecosystems in North Carolina and those throughout the U.S.
The winners will have a team with a track record, so there’s some assurance that it will be successful at executing the program. Winners will clearly state outcomes and how they’ll be measured and will have a plan for sustainability following the funding. They’ll also leverage NC IDEA’s resources and potentially partner with other complimentary organizations or activities. Applicants must provide a budget, but Ruhe insists they don’t have to be self-sufficient yet. Financial projections will help them elaborate on a long-term vision for their programs.
Timing must also be right. Winners should explain why they need the funds now.
According to board chair Myer, a survey of entrepreneurs completed last year revealed many resources helping very early and seed stage companies but not so many focused on later and growth stage assistance. That could be an area of emphasis for the board. He says other elements of the survey will be considered during due diligence as well.
The grants are open to new and existing organizations, but not to endowments or capital campaigns, lobbying organizations or political parties, fraternal groups or individuals. Innovative ideas are encouraged.
Here are the questions to answer during a write-in portion of the application (which should be no longer than 10 pages):
Briefly describe your organization. Are you a nonprofit or for profit? Who are your constituents? Mission What is your organization’s mission?
Proposed Program/ Project
Describe your proposed program or project. Be specific. Is this an existing program or project or is it new? Be sure to address whom this program or project is targeted to impact. What is the geographic scope of the proposed program or project?
Outcomes & Metrics
What are the expected outcomes of the proposed program or project? Be specific about what will constitute success. Describe the milestones and metrics the organization expects to reach if a grant is awarded. Milestones should be significant and measurable.
How will the projected outcomes further NC IDEA’s mission? How do the projected outcomes relate to NC IDEA’s strategies?
Tell us about any related programs you are executing or have executed (if any). Describe concrete results achieved. Are there any similar programs or projects that another organization is currently deploying or working on?
List the key members of the team that will be involved in executing the proposed program or project. Describe the extent of their involvement and their current role within the organization. Briefly describe each individual’s qualifications and the relevant aspects of their background as it relates to successfully executing the proposed program or project. Do the members of this team have a successful track record?
Grant Request & Budget
Provide an overview of the funds being requested for this grant and how they will be used. In addition, please provide a summary budget in Appendix 1 of the Proposal Template (separate document) to provide greater detail and list budget items, dollar amounts and projected dates on when the funds will be spent. If you are requesting general operating support, please provide your operating budget. Grant requests can be up to $250,000 in total and paid over a period of one to three years.
How are your operations currently funded? To what extent would an award from NC IDEA be leveraged? Will other resources complement the proposed program or project?
How will this proposed program or project be sustained into the future?
Describe how this grant will impact your organization. What additional milestones would this grant enable the organization to achieve? Describe the path that the organization would take if this grant is not awarded.
What else should we know about your proposal but failed to ask?