IBank Announces Additional Funding to Support Its Expanding Venture Capital Access Program
State adds up to $50 million to increase new VC program’s reach and effectiveness
SACRAMENTO (December 4, 2023) — Today, the state of California’s Infrastructure and Economic Development Bank (IBank) announced a new state supplement fund designed to increase effectiveness of its Expanding Venture Capital Access program.
Launched in 2022, the program was designed to create a more inclusive VC ecosystem by supporting underrepresented fund managers and entrepreneurs. The program is funded by $200 million of California’s $1.2 billion allocation from the U.S. Treasury’s State Small Business Credit Initiative (SSBCI). SSBCI provides capital to fund small businesses, including those that are run by socially and economically disadvantaged individuals. This new supplement will add up to $50 million from the state’s Small Business Expansion Fund to commit $250 million for the program.
“With any new program, the early days are often the most important. Now that we have been in the market and started deploying funds, we’ve been able to gather real-world feedback from emerging investors and entrepreneurs the program was designed to support,” said Derrick Tang, IBank Deputy Director of Venture Capital.
“By creating this state supplement fund, we are directly addressing market feedback to improve our VC program and better meet our mission,” said Scott Wu, IBank Executive Director. “We understand that restrictions built into the federal SSBCI funding can create challenges for some emerging investors, especially those starting their first funds. The state supplement allows fund managers to overcome those challenges and contribute more effectively to an inclusive VC industry.”
The state supplement will enable the VC program to make investments in venture funds under the same economic terms as other market investors, which reduces burden on the fund manager and encourages catalytic private investment.
About the Expanding Venture Capital Access Program: While California is home to many of the world’s top venture capital firms, the VC community is demographically concentrated, making it challenging for underserved investors and startups to access funding. Studies have shown that startups led by inclusive teams have generated better investment returns than teams that lack diversity.
The Expanding Venture Capital Access program’s primary focus is investing in underrepresented VC fund managers, including those in geographic areas that are socio-economically disadvantaged or that receive very limited VC funding. The program is also looking to make investments that promote climate equity and climate justice.
Administered by IBank, part of the Governor’s Office of Business and Economic Development (GO-Biz), in partnership with Cambridge Associates, the Expanding Venture Capital Access program made its first investment in June — $4.1 million in Unshackled Ventures, an immigrant-entrepreneur founded VC fund.
Interested VC fund managers can visit IBank’s Expanding Venture Capital Access webpage to learn more.
About GO-Biz
The Governor’s Office of Business and Economic Development (GO-Biz) serves as the State of California’s leader for job growth and economic development efforts. GO-Biz offers a range of services to business owners including: attraction, retention and expansion services, site selection, permit streamlining, clearing of regulatory hurdles, small business assistance, international trade development, assistance with state government, and much more. For more information visit the GO-Biz website.
About IBank
IBank was created in 1994 to finance public infrastructure and private development that promote a healthy climate for jobs, contribute to a strong economy, and improve the quality of life in California communities. IBank is located within the Governor’s Office of Business and Economic Development and is governed by a five-member Board of Directors. IBank has broad authority to issue tax-exempt and taxable revenue bonds, provide financing to public agencies, provide credit enhancements, acquire or lease facilities, leverage state and federal funds and provide loan guarantees and other credit enhancements to small businesses. Find more information at www.ibank.ca.gov.
Mailing Address:
P.O. Box 2830, Sacramento, CA 95812-2830
Main Telephone: 916.341.6600
www.ibank.ca.gov
Karen C. Naungayan
Email Karen, HERE
916.207.9132