ARC funds regional seed fund network that includes SSTI members

The Appalachian Regional Commission (ARC) recently announced $3,889,964 in funding for the Appalachian Investors Alliance (AIA),  a seed fund network that includes several SSTI members. The award was funded through ARC’s Appalachian Regional Initiative for Stronger Economies (ARISE) initiative.

SSTI caught up with Eric Fischer, a fund manager at AIA, for some details about AIA and the opportunity the grant enables. AIA will use ARISE funding to develop and launch six new angel and micro-venture funds and launch the Appalachian Venture Foundry to prepare businesses for investments within six Appalachian states, according to Project Snapshot from ARC.

Fischer noted that AIA collaborates with more than 30 regional partners. These groups identify companies seeking investment funding and connect them to the three service tiers, a progressive educational process through which companies move as they learn what they need to do to appeal to investors. “This is where our partners come into play, and it's the most important part of our partnership network,” said Fischer. This network, he said, grew one partner at a time “slowly and organically.” The network includes SSTI members Innovate Mississippi, Shawnee State University, and Ben Franklin Technology Partners.

 “We're going to continue to help raise the angel funds,” said Fischer. “(We will) continue to support them and give them back-office support (and) technical assistance. But we're going to go one step further this time around … to try to fix the quality of deal flow gap that exists.”

"AIA will serve 350 businesses through direct business technical assistance, create six businesses, improve 165 businesses, leverage $250 million in private funding, and add 400 jobs over the 3-year performance period," according to ARC. Fischer noted that AIA has already passed the $250 million in private funding. "We eclipsed that mark in our last grant,” he said. “Currently … it's $972 million.”

He also mentioned that “the folks that are getting impacted are the ones that either receive investment from us in one of our funds or … other levels with the foundry.” These impacts with the foundry include such positives as increasing revenue and confidence in pitching to investors resulting from foundry services.

Fischer noted that AIA often sees entrepreneurs with good ideas and some business skills who are "missing pieces in their business plan that make them less than robust and less than investable. And what we're trying to do is pull them towards an investment.”  The "pulling" is done through the three-tiered, one-on-one educational process. The first tier focuses on identifying gaps that make the company uninvestable at its current level of development. The second tier of service involves helping the company with some ideas and help with fixing those gaps. The services for companies reaching the third tier include hiring experts to help the company deal with things such as putting together a marketing plan or looking at the financials. He also noted that not all companies move past the first tier and might not be counted as “improved.”

In all, ARC awarded $16.9 million in ARISE grants to five organizations. The other four ARISE grantees are:

• Save the Children Federation, Inc., to which ARC awarded $8,000,000 to grow the region’s childcare and early education workforce in Kentucky, Tennessee, and West Virginia through training, credentialing, apprenticeships, and technical assistance.

•  The Beneficial Electrification League, to which ARC awarded $4,500,000 to modernize electric utility grid infrastructure in Alabama, Georgia, Mississippi, North Carolina, New York, Ohio, Pennsylvania, and Tennessee.
• Carnegie Melon University, to which ARC awarded $500,000 to plan for the expansion of job skills matching and career support services in Pennsylvania and West Virginia.
• The Pennsylvania Environmental Council, to which ARC awarded $72,219 to plan for improved trail connectivity to boost tourism in Pennsylvania and New York, including the Seneca Nation of Indians.

The Appalachian Regional Commission (ARC) recently announced the launch of READY Grants to Grow, a new $9 million funding opportunity that will award up to $500,000. Any organization eligible to apply for an ARC grant can apply for READY Grants to Grow, though certain requirements apply. A pre-application webinar will be held on October 10, 2024 at 11:00 a.m. ET. Interested applicants must submit a letter of intent to apply by November 1, 2024 to access application portal. Grant applications are due February 14, 2025.

An SSTI Federal Funding Video that details ARC grants that can be used for TBED projects is available here.