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Innovative Funding at the Edges

September 29, 2016

Venture development organizations are reaching into new territory for funding partners and finding success in innovative models. Two new funds, the San Diego Tech & Life Science Investor Syndicate and Rev1 Fund I in Columbus, OH, have recently opened with less traditional funding sources, testing the waters of crowdfunding and heavy corporate backing, respectively.  The San Diego fund, launched by CONNECT, allows anyone wanting to invest $1,000 the opportunity to participate alongside more experienced lead investors. Rev1 Fund I gathered significant backing from community corporate powerhouses located in Columbus, such as Nationwide, Cardinal Health, and Worthington Industries. It also has the backing of institutions like Ohio State University and the Columbus Foundation, as well as government backing from Ohio Third Frontier. The funding models present two ends of the spectrum of defining community involvement for venture development organizations.

The San Diego Tech & Life Science Investor Syndicate expects to invest in about six deals a year, helping to fund early stage technology and life sciences startups in San Diego.  Crowdfunding has been utilized before by venture development organizations, but in donation-driven models. For example, Launch NY exceeded its $100,000 crowdfunding goal last year to help fund startups in west and central New York. The online platform was a segment of larger, traditional sourcing for the new fund, which targeted $5 million over the long term. And the Alliance of Women Entrepreneurs (AWE) Ventures used a crowdfunded, donation-driven platform in its rollout of a new fund in support of women-led startups and emerging enterprises. The Ben Franklin Technology Partners of southeastern Pennsylvania fund agreed to match contributions up to $250,000 to form a total contribution pool of $500,000.

The San Diego model is different in form from the Launch NY and AWE Ventures approach because investors in the San Diego syndicate could get a financial return if the fund is successful.

Rev1 Fund I is a $22 million fund marking the most significant seed fund in Columbus history.  While it may be structured like other venture funds, it capitalizes on the number of the Fortune 1000 firms present in Columbus, inviting many of those corporations and area institutions to participate in the marketplace. Seeking to fund seed stage and seed stage-plus startups, the fund focuses on high-growth technology sector startups, including software, hardware, life sciences, alternative energy, and advanced materials.

Speakers representing different funding models will be present at this year’s SSTI Annual Conference: Innovation with Purpose: Shaping Future Opportunities. Tom Walker, president and CEO of Rev 1 Ventures, a co-host of this year’s conference, will moderate the session, A Regional Approach to Innovation: The Central Ohio Story. Marnie LaVigne, president and CEO of Launch NY, will moderate the session, Crowdfunding is Here, Now What? An Open Discussion.

 Registration for the conference is still open. More information is available at ssticonference.org.

California, Ohioangel capital, crowdfunding, capital