In Nashville, a new microfund for entrepreneurs
There is a new source of start-up capital in Nashville.
Solidus Company announced today the formation of a microfund to support local entrepreneurs and to help accelerate the growth of start-ups in the Middle Tennessee area. JumpStart Foundry will focus on very early-stage concepts. Over the next 12 months, the microfund intends to select 10-14 entrepreneurs for the program who will receive financial, business, and technological support to accelerate the growth of their businesses.
Each of the selected concepts will receive $15,000 in equity capital and special arrangements with participating partners for marketing, accounting, legal and technology services. In addition, three members of the group will use their knowledge and experience to mentor the entrepreneur and accelerate the success of the project. In return for this investment, JumpStart Foundry will receive a collective 10% ownership in the Common Stock of the company.
Townes Duncan, President of Solidus Company, explained why he believes this fund will make an impact on the local start-up environment. "Traditional venture capital funds require investments to be at least $1-5 million in size. This amount of capital is often much more than an entrepreneur can effectively utilize at the very early-stage of concept development. Over the last few months, Solidus has assembled 18 experienced, successful entrepreneurs who want to solve this early-stage funding gap and share Solidus' passion for helping promising start-ups. Together, this founding group set out to craft a new way to provide support, both financial and operational, to innovative and promising entrepreneurs."
According to founding member Scott Kozicki, "the JumpStart Foundry name is meant to be symbolic of our two-fold mission. The fund intends to help launch or "jump-start" emerging new business concepts. Further, we will also act as a foundry by leveraging our experienced group of founders to help mold the concept into an exciting, emerging business. To complete our offering, Jumpstart Foundry will also establish partnerships with local organizations to offer important business services at either free or dramatically reduced pricing for the fund's investments. These partnerships will allow our entrepreneurs to focus their time and capital towards building value in their company."
"Over the past few years, we have seen models like Y Combinator and Tech Stars mature and grow into significant economic development engines for their communities," said Vic Gatto, Partner, Solidus. "We believe JumpStart Foundry incorporates the best attributes of these predecessors but is also tailored to meet the unique needs of Nashville by leveraging our existing industries (i.e. healthcare, music, & transaction processing) to spur innovation."
Belmont University Center for Entrepreneurship is providing meeting space and other support for this initiative. However, because we set a "no investment, no consulting fee" policy for alumni and student ventures, I will not be participating financially in this fund. We have already had students and alumni from Belmont express interest in this new program.
Microfunds are part of the changing landscape in new venture financing.
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