Seed and venture capital programs exist throughout the country. While the public sector may help to initiate such programs, they are largely operated by the private sector. Economic development practitioners can help to foster economic activity by steering new companies, entrepreneurs and start-ups towards venture capital and private equity firms in their states or communities. This type of funding is critical in providing capital for emerging businesses.
Seed capital is an initial capital investment into a new business venture or product line. Often, this capital allows an entrepreneur to launch a new venture without drawing upon traditional lending sources. As a general rule, seed capital is provided by private investors in exchange for a high rate of return on their investment. Seed capital recipients are typically businesses or entrepreneurs with less than one year of history. In most cases, they have not yet produced a commercial product or service. Investors often seek an equity or ownership position in the new company. This represents a considerable tradeoff, as the entrepreneur must cede an ownership interest or pay an unusually high rate of return in order to gain access to capital.
Venture capitalists are financiers that take a role in the management of young, growing companies. Venture capital firms are generally private partnerships or corporations funded by private and public pension funds, endowment funds, foundations, corporations, individuals and foreign investors. Venture capital is different from seed capital because venture capital firms typically do not invest in companies until they are somewhat established. Venture capitalists often play a hands-on role in the management of a new, growing company, and may also assist with product development. They typically take a high risk in anticipation of a relatively higher rate of return over a period of time.
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Interested in learning about financing small business? This section contains resources on understanding the basics of Seed & Venture Capital.
Access to Capital and Credit in Native CommunitiesMembers only Login
This document, “Access to Capital and Credit in Native Communities: A Data Review” (Data Review) begins to answer the questions: Where does Native America stand now in terms of capital and credit access? What has been the effect of new action and new approaches by policymakers and financial entrepreneurs? What are Native Communities’ ongoing and future capital and needs?
State Strategies to Help Businesses Launch and ExpandMembers only Login
This report, produced by The PEW Charitable Trusts, examines how state governments can find solutions to policies that undermine opportunities for investment and job creation when businesses spend too much time or money on inefficient regulatory processes, or when new business projects get delayed because firms don’t understand how to comply with the rules.
Strengthening Access to Capital ProgramsMembers only Login
Vincent DiCara, Owner of DiCara Training and Consulting, LLC, discusses access to capital and the benefits of leveraging public sector support for even greater private sector investment and explore a variety of programs available in the region.
Unlocking Capital AccessMembers only Login
Representatives from the California Association of Micro Enterprise Opportunity and California Pollution Control Financing Authority look at how California creates access to capital for micro businesses and enterprises.
Search the map below for small business finance programs by state. This specialized search is part of CDFA's State Financing Program Directory
, the only online resource cataloging the development finance programs offered by state governments. Click on a state to see a sample of state small business finance programs available. Login with a CDFA Member account at the top of the page to view full results.
California Rural Infrastructure Finance Guidebook
CALED knows from its work supporting economic development throughout California that infrastructure financing is a challenge for many rural communities. CALED collaborated with CDFA to develop this guidebook to meet the need for a resource to help build capacity in those areas, as well as move economic development projects forward.
Fact Sheet on Farm Credit System Farmer Lending Results for 2018 Members only Login
This information summarizes Farm Credit System 2018 lending activity to young, beginning, and small (YBS) farmers, ranchers, and producers or harvesters of aquatic products. For total System loans, the number of new loans made in 2018 declined by 21.4% compared with 2017. The number of loans to young farmers declined by 17.7%, to beginning farmers by 15.5%, and to small farmers by 16.1%.
Fair Food Fund 5 Year Impact ReportMembers only Login
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The Fair Food Fund was designed to meet these entrepreneurs where they are and take them where they want to go. Since 2013, we have invested more than $3 million in 13 food businesses. Just as important is supporting these businesses on the road to profitability; that’s why we’ve also invested more than $700,000 in business assistance, offering more than 70 enterprises solutions that range from multi-day intensive trainings to customized one-on-one support.
Innovation Finance Reference Guide
The Innovation Finance Reference Guide explores the growing seed, venture capital and angel investment industry. Written by Robert Heard of Cimarron Capital Partners and Jim Troxel of Development Capital Networks, this guide gives development finance agencies a roadmap for building an innovation finance initiative that supports entrepreneurship, business investment, job creation, and 21st century technology development.
Practitioner's Guide to Economic Development Finance
The Practitioner's Guide to Economic Development Finance 2nd Edition is the only comprehensive resource dedicated to building and utilizing the development finance toolbox. The Practitioner's Guide provides the insight and practical information needed to critically understand how economic development is financed and the tools, strategies and techniques used to build strong communities. From bonds, tax increment finance and special districts to tax credits, seed & venture capital, revolving loan funds and much more, this Guide outlines the financing tools required for succeeding in today's competitive economic development climate.
Unlocking Capital: A Handbook for Becoming a High Performing Development Finance Agency
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Unlocking Capital: A Handbook for Becoming a High Performing Development Finance Agency (Handbook) serves as a companion to the Practitioner’s Guide to help illuminate the structures of development finance agencies (DFAs), essential conduits to access development finance tools. The Handbook provides an overview of DFAs and their myriad roles in various development efforts. Included in this discussion is a comprehensive look at over a dozen high-performing DFAs throughout the country. The Handbook is designed to be a starting point for local leaders to engage in the creation or acceleration of a DFA to build and utilize the development finance toolbox.
The CDFA Seed & Venture Capital Finance Course
explores the growing seed, venture capital and angel investment industry and provides clear direction for designing and implementing capital formation models at the local, regional, and state levels. This course differs from other capital formation curriculums in that it focuses more concretely on designing a program that uses public-sector connections, resources and coordination to drive long-term and sustainable private-sector investment.
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CDFA Federal Policy Conference (cancelled)
View more Upcoming Events
April 14-15, 2020
The federal government plays a critical role in driving private and public investment in innovation, job creation, infrastructure, and community development. With the 2020 presidential election quickly approaching, development finance will be a key policy issue across the nation. The 116th Congress will also play a major role in shaping our country’s economic development policy going forward. It's up to the development finance community to focus the national discussion on smart federal policy, and CDFA is the voice of the economic development finance community on Capitol Hill. For these reasons, CDFA will host its CDFA Federal Policy Conference on April 14-15 in Washington DC.
CDFA // BNY Mellon Development Finance Webcast Series: Sourcing Local Capital for Community ProjectsMembers only Login
Communities that face socioeconomic challenges often lack the capacity to undertake the use of many financing tools that are used for economic growth and development. In urban, rural, and suburban communities alike, communities are exploring locally derived methods of developing access to capital. From crowdfunding to co-ops and creative investment approaches, during this installment of the CDFA // BNY Mellon Development Finance Webcast Series, we learned about the tools that are being used to bridge the financing gap and make local economies work.
CDFA EDA Revolving Loan Fund Webinar Series: Revisiting Your Revolving Loan Fund Plan
Designing the Revolving Loan Fund is one of the most critical aspects of the program process. The design process should be thorough and clearly defined to address the goals and objectives of the RLF while also clearly outlining the expectations of borrowers. It’s important to have regular reviews of the RLF program to make sure it is still relevant and effective.
CDFA EDA Revolving Loan Fund Webinar Series: Building Partnerships to Maximize Your RLF Impact
The varying size of Revolving Loan Funds leaves many organizations without the financial and staff capacity to effectively support all aspects of a lending program and building partnerships can enhance its effectiveness and impact. Key partnerships could include providing technical assistance for borrowers, outsourcing the servicing of the portfolio, or even in some cases, partnering with another organization that can assume the management of the entire RLF program. Listen as Robyn Jacobson, Robin Weis, and Andy Rachlin discuss the various partnerships your organization can structure in order to maximize your RLF's impact.
CDFA // BNY Mellon Webcast Series: Capital for Main Street
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Whether it is supporting small businesses, investing in historic buildings, or repairing aging infrastructure, Main Street communities need access to capital in various forms. Small downtowns and commercial districts contain a myriad of uses and face unique challenges when using traditional forms of financing. During this installment of the CDFA // BNY Mellon Development Finance Webcast Series, we explored some of the creative financing tools that are being utilized around the country.