CA adds up to $50 Million to venture capital fund for underrepresented VC managers and entrepreneurs

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CALIFORNIA – California’s Infrastructure and Economic Development Bank (IBank) announced, December 4, a new state supplement fund – up to $50 million for the Expanding Venture Capital Access program to support underrepresented fund managers and entrepreneurs.

According to IBank, studies have shown that startups led by inclusive teams have generated better investment returns than teams that lack diversity.

$250 million program funds

Launched in 2022, IBank designed the Expanding Venture Capital Access program to create a more inclusive venture capital (VC) ecosystem by supporting underrepresented fund managers and entrepreneurs. The program is funded by $200 million of California’s $1.2 billion allocation from the U.S. Treasury’s State Small Business Credit Initiative (SSBCI).

The additional $50 million brings the fund to a total of $250 million available for investment.

Challenges for emerging investors

IBank Executive Director Scott Wu said they understand that restrictions built into the federal SSBCI funding can create challenges for some emerging investors, especially those starting their first funds. 

These challenges could include limitations on how the funds can be used, eligibility criteria that may be restrictive, or other conditions that make it difficult for emerging investors to fully benefit from or participate in the SSBCI program. 

“The state supplement allows fund managers to overcome those challenges and contribute more effectively to an inclusive VC industry,” said Wu.

Program Details

According to IBank, California is home to a large and thriving venture capital community, however, it remains demographically concentrated and challenging for underrepresented fund managers and entrepreneurs to access capital. 

The program focuses on venture capital fund managers targeting fund sizes of at least $50 million.

To apply, the program requires a fund pitch deck that should include:

  • Investment strategy;
  • A list of historical and current investments;
  • Investment track record with current valuations;
  • Ownership detail;
  • Team bios;
  • A list of references;
  • Fundraising timeline;
  • Anchor investor and other Limited Partners.

The program can also, on an opportunistic basis, co-invest directly in startups that have secured a lead investor in the current financing round (debt does not qualify).

For more information about the Expanding Venture Capital Access visit https://ibank.ca.gov/small-business/venture-capital-program/

RELATED: CA awards over $140 Million in grants and tax credits – next round of applications due Jan. 2024

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