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Lots of Dinero Still on the Table: SBA’s $1B Impact Investment Fund

3p Contributor | Thursday May 24th, 2012 | 2 Comments

By G. Nagesh Rao

How many of you knew about the U.S. Small Business Administration (SBA)  “Impact Investment Initiative”? Are any of you aware of the announcement that Administrator Karen Mills made over a year and a half ago at the unveiling of the White House’s Startup America program? Most likely, not many of you, as has been the case during my time travels across the U.S., which is unfortunate, because the U.S. government has a plethora of amazing programs but if you are not plugged into the DC scene it is tough to have the most up-to-date “411 on Govt 101.” My goal with these guest postings is to help bridge the knowledge gap divide.

Let’s talk shop, SBA’s I3 program is a $1 billion dollar initiative directed towards the supplemental financing of entrepreneurial endeavors that take a triple bottom line philosophy and approach. As Andrew Burger commented in his March 12th posting, the first endeavor to have finance backing by this initiative just occurred with SJF III Ventures for cleantech economies. Earlier a more localized focused impact investment fund was created for the Michigan area called InvestMichigan!

The initiatives focus on areas pertaining to “clean energy” and “education” business endeavors focused from a “place-based” or “sector-based” methodology, as they are seen as critical priorities of growth and can most likely be easily measured quantitatively and qualitatively for impact on a region’s economic growth over a period of time.

So how do you, the social entrepreneur, take advantage of this funding opportunity from SBA? First and foremost, this initiative is best taken advantage of via a public-private partnership entity to help make the case for use of implementation of the funds into an “economic ecosystem.” Secondly, some bright and licensed financial professionals will need to be recruited to help drive the financing aspects of the project forward in a particular region that could benefit from the funding opportunity while enabling a sustainable growth model. Finally, the initiatives need to, at this time, focus on areas pertaining to “clean energy” and “education” business endeavors as they are seen as critical priorities of growth and can most likely be easily measured quantitatively and qualitatively for impact on a region’s economic growth over a period of time.

At this time, only one major “green-lighted” project has resulted, which means there is still a lot of money on the table and thus for the social entrepreneur it would be wise to formulate a team to take advantage of this federal funding opportunity. The best part about this funding opportunity is that it is geared towards enabling sustainable and triple bottom line business endeavors. What is not to love?

{Image Credit: SBA}                                                                                                                                                                                                    
G. Nagesh Rao was a former Senior Policy Advisor with the US Department of Commerce’s Office of Innovation and Entrepreneurship and the United States Patent and Trademark Office. Currently he serves as an Expert Strategist on IP-Law and Technology Commercialization to a number of  cutting edge organizations and councils including Publicbeat, Launch:Energy, LACI, and Global Access in Action. Finally he does randomly tweet on twitter when incentivized to do so.

 

 


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  • http://twitter.com/ChuckBlakeman Chuck Blakeman

    What’s not to love is that this is part of the $2billion set aside from the SBA for venture capitalists that is NOT available to ANY small business owners.  $1billion of it is going directly to venture capitalists – an incredible thing considering the government’s constant carping on the dangers of venture capitalists. 

    And the other $1billion talked about here is going only to these green companies, but not just any green company.  Only green companies that are considered very high-growth already and are working with venture capitalists.  If you don’t have that going for you, this is not to love.

    If you’re not in bed with venture capitalists and the government (the author here conveniently disguises it as a “public/private partnership”), then you will not love this program.  For the 28 million small business owners with fewer than 20 employees, which constitutes 99% of all businesses in America, this program is not available to you.  That is what not to love.

  • G. Nagesh Rao

    I understand and appreciate your concerns about this endeavor and it’s perceived inability to participate directly as a small business owner. However there are a number of other viable SBA and other US Govt-Agency backed funding opps available for small business owners. Besides that point, the focus of these funds is to encourage orgs with better infrastructure and established networks to be more proactive in working with small business owners such as yourself. The programs are trying to maximize the greatest return on investment in a risk-cautious setting, and it is not like any VC firm can just have access to the funds. Only 2 funds have been officially licensed, which means there is a high threshold to pass and various safety mechanisms involved to make sure the fund is utilized appropriately and effectively. Finally given the limited resources we have in the world today, smart and savvy business owners need to figure out how to do more with less, and these types of programmatic endeavors are designed to help with sharing of resources and aligning goals between various stakeholders pragmatically. Finally it is great to hear from folks like yourself regularly and see a more active role in the civic participation process, because the input helps develop better ideas.