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| Home > Businesses |
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| Seed Investments |
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The Seed Capital Fund is designed to further emerging entrepreneurial ventures by financing product concept, development and market research. Preference is given to projects exhibiting potential for substantial growth through the introduction of new products and services. In return for Seed Capital Fund investments, the Initiative Foundation may negotiate company equity or royalties that reflect the incurred risk.
For business start-up and expansion projects, Initiative Foundation business financing programs meet the “gap” between the financing a local lender is able to provide and the equity the owner is able to contribute. Financial participation by a local lender is required.
Investment Amount: $50,000 maximum per investment
Eligible Investments
- Market research
- Operating capital
- Prototype development and testing
- New product research and development
- Other uses deemed appropriate
Collateral and Credit Worthiness
- Owner commitment (equity), credit worthiness and capacity for repayment must be shown.
- Personal guaranties from principal owners are required.
- It is standard policy to place liens on any proprietary or patented product or service.
Terms and Fees
- Investments generally have convertible options exercised by the Initiative Foundation as direct loans, royalty or equity positions. These are negotiated individually based on a risk-opportunity rating analysis and other factors.
- The Initiative Foundation charges a 1% origination fee payable by the borrower at loan closing. The borrower is also responsible for any legal fees associated with documenting and closing the investment.
Borrower Requirements
- Due diligence in product and market validation
- A sound business plan with financial projections
- Demonstrated management skills, product development and marketing experience
- A personal investment of equity or cash greater than or equal to the Seed Capital Fund investment
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