HomeMy WebLinkAboutEcon Dev Loan Request - VentureBoxDate: October 5, 2011
To: Board of County Commissioners
From: Erik Kropp, Interim County Administrator
Re: Economic Development Fund Request
EDCO will present an application for the Economic Development Fund at your October
12,2011 work session. The application (attached) is from VentureBox, a Bend-based
new business accelerator.
The current balance of the Economic Development Fund is $205,200.
VentureBox
Central Oregon sStar/up Accelerator
VentureBox is a Bend-based new business accelerator that will apply quality mentorships, process
and a high level of collaboration with statewide resources to increase the number of «investor ready"
stan-up companies. As a point of reference, an incubator creates ideas and an accelerator is a
resource for translating good ideas into successful companies. Focusing on concept stage stanups,
VentureBox suppons scalable companies in the traded sector that have plans to implement
innovative product and service solutions.
The Venture Box accelerator is a key element of the entrepreneurial ecosystem being developed as
pan of the Venture Catalyst initiative. Working with EDCO and the Oregon Entrepreneurs
Network, the leading statewide industry organization for entrepreneurial activity" VentureBox will
apply resources already in place with the EDCO's Stable of Expens, Pub Talks, and the Bend
Venture Conference as well as "economic gardening" effons undezwayat the state and local level.
Venture Box Program
VentureBox will provide its client entrepreneurs with a top quality program curriculum based on
the best practices derived from the world's leading startup accelerators. At the core of the
program is the Venture Launch program, sometimes referred to as a bootcamp .. This is an
intensive 12 week curriculum that will help startups effectively structure, plan, develop and
launch their businesses.
Stanup companies will panicipate in a programmed curriculum structured on six topical areas that
are fundamental to creating successful entetprises including:
1. Basics -The stanup experience, vision and values; legal structures
2. Market -Market research, size, growth and share, venical markets, lead customers, position
sustainability, branding, PR
3. Technology -Product definition & the development processes, Intellectual propeny, sourcing
4. Organization -Co-founders & leadership team; organizational development; HR outsourcing
5. Financial-Developing a P&L, perlonnance metrics, funding alternatives, approaching
investors, negotiations involving equity.
6. Launch -Graduation -Investor Day Pitch.
Each topic will be 50% educational and assessment with the balance used by companies and
mentors to develop plans, strategies and milestones for their businesses. All panicipants will be
required to present a review at the completion of each topic that will outline the companys
situation, needs risks and opponunities related to the topic. The review will be attended by
VentureBox staff and mentors.
The program concludes with the opponunity for qualified companies to panicipate in a pitch to a
team of selected investors. Companies will qualify for Investor Day based on t4~_~,din~SL-__________ ---
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...... demonstrated in the mentor reviews and overall assessment factors gathered during the course of
the program.
Venture Box Structure
VentureBox is a not-for-profit entetprise operating under the 501(c)3 umbrella of the Tech Alliance
of Central Oregon (www.techallianceco.o~. The Tech Alliance suppons and promotes the
region's high technology companies and individuals through a number of initiatives including co
working space (TechSpace Bend), supporting user groups (IT directors, web professionals,
information systems, etc.) networking events (The Unconference) and providing up-ta-date
information about the technology industry. This structure will allow the entity to secure funding
from foundations, state and local government as well as private donations. Its staff of two
professionals will develop, coordinate and manage a team of qualified mentors sourced from
EDCO's Stable ofExperts along with interns and volunteers who will provide education, coaching
and evaluation semces for participating companies.
The VentureBox accelerator will also derive funding from tuition and fees generated by its program
participants. In many cases these fees will be subsidized through sponsored scholarships obtained
from individuals, companies and the community at large.
The structure also anticipates a parallel-but arms length -private organization in the form of an
LLC or Limited Pattnership (see attached schematic). This organization will be a vehicle for
investors interested in small investments in companies in exchange for equity. It will also house the
accelerator's mentor resources providing a vehicle for them to hold a share of the same equity pool
as an incentive for their contnbutions to the accelerator.. The investment entity will also maintain a
share of the equity pool on behalf of the accelerator itself. In the event of a liquidity event of one of
the companies in the portfolio, the investors, mentors and accelerator will all share in a cash
distnbution on a pro rata basis reflecting shares in the investment company.
Status and Launch Plan
A three year financial plan has been completed and an Executive Director is in place and completing
final structural elements, program definition and initial funding. VentureBox has obtained a
commitment of $61,000 in grants and private donations to date. This leaves a shortfall of $14,000 to
our launch goal of $75,000 required to cover first year cash flow needs .. At this time we are working
diligently to identify sources of funds in order to close our list of founding donors by the Bend
Venture Conference (BVq on October 14.
Public announcement and launch will occur at the BVe, just after the conference's keynote speaker.
We anticipate leveraging this high profile event to highlight our founding donors. 'With an
expected attendance of 300 plus business leaders and investors across Oregon and the Pacific
Northwest, we intend to maximize media coverage by actively engaging the local, regional and
national press. We would very much like to have Deschutes County recognized at this event and in
subsequent media outreach.
The first class of early stage companies to begin the 12-week program will start in Januaty 2012.
James A Boeddeker -10/6120 II 2
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