New foundation seeks to build $5M entrepreneurial fund at Simpson
Organizers of Simpson College’s entrepreneurial program, EMERGE@Simpson, have formed a nonprofit foundation aimed at providing a source of seed funding and expertise to entrepreneurial ventures at Simpson as well as other small private colleges and community colleges in Iowa.
“Our goal is to leverage access to Iowa’s startup accelerators using untapped resources,” said Todd Kielkopf, who was named executive director of the Emerge Foundation in August. “We target pre-seed, technology-focused ventures likely to benefit from a combination of smaller-college human capital and their passionate stakeholders.”
Simpson launched its entrepreneurial development program three years ago. Kielkopf, who previously worked in the power industry as general manager of Indianola Municipal Utilities, was part of the task force that developed the EMERGE program, and was named part-time coordinator of the program in June 2016 after the departure of Chris Draper. He works with Jerry Kelley, former mayor of Indianola, who leads the Gerald R. Edwards Entrepreneurial Center on Simpson’s campus.
The foundation’s board of directors has adopted a $300,000 funding plan to launch its operations and initial ventures, and already has more than $200,000 pledged from early supporters, Kielkopf said. The board is initially being chaired by Gary Ruble, retired CEO of Indianola-based CemenTech, who is a Simpson alum. A permanent chair is expected to be named within the next couple of months.
A primary goal of the foundation is to develop and fund a $5 million seed capital fund that can serve as the lead investor for small college and community college-affiliated startups.
“I think everyone would say that seed capital is in short supply, particularly from lead investors,” Kielkopf said. “If we can help get a little more stakeholder buy-in early, those are kind of the key ingredients.”
Investments can be made through asset pledges to guarantee a line of credit; through direct individual loans to the foundation; or donations to the EMERGE@Simpson program. The foundation intends to repay the line of credit or direct loans through ownership stakes in businesses it incubates, management fees collected, and donations from Simpson College stakeholders.
Another goal of the foundation is to work with startups to help them with seed capital to gain entry to accelerator programs. Kielkopf also envisions the foundation partnering with other private colleges or community colleges that lack access to these resources.
Kielkopf said an early impetus for forming the foundation was the need to manage shares of patent rights held by EMERGE@Simpson for a technology company founded by two Simpson professors, which subsequently became the foundation’s first investment.
That company, DNP123 Co., is now developing groundbreaking ways to structure nanoparticles into cubes, and those cubes into chains of cubes with specific shapes useful in many applications. The Emerge Foundation is providing a commercialization pathway to deploy the technology through the launch of a separate company.
Jay Simmons, president of Simpson College, said EMERGE@Simpson has provided unique talking points for recruiting students to the college. As an example, Simpson earlier this month hosted about 70 high school students for a “Startup Storm” event that paired them with students in the EMERGE program to introduce them to entrepreneurial possibilities.
Simmons said the Emerge Foundation will serve two primary purposes. “We wanted to create some separation from (the college foundation’s) activities and college endowments for accounting purposes and ease of tracking,” he said. “Second, while the purpose of the Emerge Foundation is to serve the college, we wanted a smaller board that could meet more easily. We felt a board of five to nine people made more sense for an entity like this.”
There is already a base of interest from investors, as demonstrated by the money that’s been committed, Simmons said. “Hopefully now with the foundation we can broaden the base of that program.”
To access the Emerge Foundation website, click here.