Who makes the investment decisions and provides the support services?
Innovation Fund So Cal is administered by Long Beach City College, which has a successful history of supporting entrepreneurs in the LA Basin through its management of the Small Business Development Center and the Goldman Sachs 10,000 Small Businesses Program. LBCC leverages these programs and partners with numerous incubators, accelerators, Angel and VC investors, and other partners throughout the LA Basis to support Innovation Fund SoCal applicants and determine which will become portfolio companies.
Are there Innovation Fund success stories?
Innovation Fund So Cal is based on a model originally developed at Lorain County Community College in Ohio. As of March 2014, that Innovation Fund has made 140 investments totaling over $7.5 million. Portfolio companies have since raised $145 million in follow-on funding, created over 400 jobs, and offered over 165 internships.
Does Innovation Fund So Cal limit investments to technology companies?
Yes. Innovation Fund So Cal limits invests to technology-based businesses, which it defines as:
creating and capturing value for the firm through projects that combine specialists and assets to produce and adopt technology;
producing new products, new assets, and their attributes that are intricately linked to scientific and technology advances and the firm’s asset ownership rights;
pursuing projects that search for applications for a particular technology; or
launching new ventures or uses of technology, and exploiting opportunities that rely on scientific and technical knowledge provided that their ultimate outcome is to create and capture value for the firm.
What does it mean for an entrepreneur to be coachable?
A coachable entrepreneur is willing to meet with Innovation Fund So Cal EIRs and business advisors, and accepts advice, feedback and constructive criticism.
How does Innovation Fund So Cal define innovative?
An innovative company has created a unique value proposition based on a product offering that is uncommon or nonexistent in the marketplace. In some instances, this may involve creating an entirely new market rather than just a unique product.
What does Innovation Fund So Cal mean by early market-entry startup company?
There are many different definitions for startup, early-stage, and early market companies. Innovation Fund SoCal typically invests in and works with companies that are less than three-to-five years old, have begun work on or completed an early prototype of their product, and have yet to generate significant revenues.
How does Innovation Fund So Cal define clean tech?
Innovation Fund So Cal will consider applications from innovative startups with technologies that address a wide spectrum of energy related issues from recycling to reducing pollution and energy consumption to other means of improving our ability to deal with climate related issues.
What does Innovation Fund So Cal consider advanced manufacturing?
Advanced manufacturing applicants should be able to demonstrate how their company or prototype will improve the technologies, processes or products utilized or resultant across multiple manufacturing industries.
Are there limits on the types of medical devices you will consider funding?
Innovation Fund So Cal will consider applications on a case by case basis. As important as the type of devices are the knowledge and experience of the founder(s), the path to market and growth strategies, and the likelihood of attracting follow on funding.
Will Innovation Fund So Cal accommodate entrepreneurs with full-time jobs elsewhere?
Entrepreneurs who receive Innovation Fund investments must dedicate themselves to the success of the funded company, which usually requires them or a co-founder to make it their full-time job, if not at the time of investment, in the not-too-distant future.
Are Innovation Fund So Cal portfolio companies required to operate only in the LA Basin?
Innovation Fund So Cal portfolio companies must have their principle place of business in the LA Basin. Additional consideration during the application process will be given to the location of existing and future investment, manufacturing, and job creation, with a strong bias for that which occurs within the LA Basin.
Are applicants to Innovation Fund So Cal required to have intellectual property?
Yes. Innovation Fund So Cal invests in companies that have intellectual property and entrepreneurs who have been thoughtful about how they protect it, whether through patents, trademarks, trade secrets, or other means.
Why does Innovation Fund So Cal require complicated financial forecasts?
As part of their due diligence process, investors require financial projections and the underlying assumptions. Startup founders should be able to create, understand, and defend the balance sheets, and income and cash flow statements for their startups.
Does Innovation Fund So Cal provide support to applicants for developing their financial projections?
Yes. Innovation Fund So Cal will assist applicants in developing their assumptions and financial projections, as well as coach applicants on how to present and defend their models.
Enhanced Educational Experiences
How do portfolio companies meet their enhanced educational experience requirements?
All Innovation Fund So Cal portfolio companies are required to give back to their community by offering educational experiences to students. A-level portfolio companies may satisfy their requirements by giving presentations or guest speaking at student events; offering classroom or online instruction through lectures, practicums, or independent study projects; doing informational interviews or providing job shadowing opportunities. B-level portfolio companies must provide a paid student internship.
Are there any restrictions on student interns?
Students participating in paid internships should be enrolled at an institution of higher education and are subject to all applicable local and federal labor laws. Student internships should last one semester (approximately 160 hours), with interns working approximately 10 hours per week for a minimum wage of $10/hour. Portfolio companies are expected to develop a scope of work for the internship that allows the intern to engage in and understand the inner-workings of a startup.
Innovation Fund So Cal will work with portfolio companies to develop and document internships in order to meet all program requirements.
If invited to pitch to Innovation Fund So Cal, who should attend on behalf of the applicant company?
Innovation Fund So Cal expects company (co-)founders to lead their pitch sessions, but other employees are welcome to attend.
Does Innovation Fund So Cal provide guidance regarding what should be included in applicant pitches?
Yes. Applicants should limit their pitch to 12 minutes, which will be followed by 10 minutes of Q&A. Innovation Fund So Cal will provide applicants invited to pitch with an outline of topics to be covered, as well as coach applicants on the pitch.
Does Innovation Fund So Cal have a specific template for developing and submitting financial information?
A template for submitting financial statements is available along with the application within you login dashboard. Financial statements, including all underlying assumptions, should pertain specifically to the company for which applicants are seeking funding. If applicants have existing Financial Statements, please submit in lieu of the template, provided existing Financial Statements in use provides all requested information.
How often will Innovation Fund So Cal make investments?
Innovation Fund So Cal plans to have multiple funding cycles per year. See our Application Process for specific dates and application details.
How many investments will Innovation Fund So Cal make per investment cycle?
Several factors will determine Innovation Fund So Cal investment volumes.
How many projects can applicants submit?
Applicants may submit one application per investment cycle.
May applicants apply for both A-Level and B-Level awards?
No. Applicants are required to apply for the award they feel is most appropriate given their stage of development.
How long does a business have to use the funds?
Portfolio companies are expected to use their award within six months to twelve months of funding, based on approved and agreed upon milestones and deliverables.
What are Innovation Fund So Cal’s repayment terms?
Depending on award levels, repayment is not expected for grants, and portfolio companies are expected to reimburse Innovation Fund So Cal the full amount of their loan award. If a portfolio company fails to reimburse Innovation Fund America the full amount of their award within three years of receiving its first payment, Innovation Fund So Cal, at its sole discretion, may elect to receive a repayment amount equal to four percent of the portfolio company’s growth since the first date if award.
Does Innovation Fund So Cal restrict additional investment in its portfolio companies?
No. Innovation Fund So Cal does not place limits on the rate at which its portfolio companies can pursue additional funding.
When do Innovation Fund So Cal portfolio companies need to provide their one-to-one matching investment?
Portfolio companies are expected to have available the requirement match amount as a cash investment into their business. Please contact the Innovation Fund SoCal Team to discuss any questions about the match amounts requirements and your particular circumstances.
What investment agreements are Innovation So Cal companies required to sign?
All Innovation Fund So Cal portfolio companies must sign standard agreements that include customized milestone based payment schedules and enhanced educational experience requirements. B-level portfolio company agreements also include a Fund Replenishment Rate schedule.