How one Durham-based foundation is investing in North Carolina's entrepreneurs and growing the state's innovation footprint
- The NC IDEA foundation supports
entrepreneurshipand economic development across North Carolina.
grants, seed funding, mentoring, and other programs, NC IDEA helps entrepreneursdirectly.
- Some initiatives include the NC Black Entrepreneurship Council, NC IDEA SOAR, and NC IDEA LABS.
From a non-dairy cheese brand and sustainable oyster-production company to many software, hardware, and social-media firms, the nonprofit NC IDEA invests in a variety of businesses across North Carolina.
"It's a shorter list to tell you what we wouldn't fund than what we do fund," Thom Ruhe, NC IDEA's president and CEO, told Insider.
Durham is a "national case study for what an entrepreneurial ecosystem can do," and the region has long been a center for innovation, Ruhe, who previously directed entrepreneurial programs at the Kauffman Foundation, said.
"There's a lot of collaborative energy here, more than I've experienced in other markets," he said. "It's refreshing and productive. I know it's cliche to say, the rising tide argument, but it really has helped here."
Here's a look at how NC IDEA invests in entrepreneurs, who the organization believes transform communities and boost local economic development.
Broadening its reach to help more entrepreneurs
NC IDEA is a private foundation that was created in 2006 under the Council for Entrepreneurial Development, a nonprofit connecting North Carolina entrepreneurs to the resources they need. It became independent in 2015.
Unlike other foundations, such as the Gates Foundation or Kauffman Foundation, NC IDEA doesn't have a benefactor, Ruhe said. The primary source for its endowment came from an equity investment that the state of North Carolina made in the 1990s and liquidated in the early 2000s.
To protect the investment, the private foundation was established to economically empower people through entrepreneurship. NC IDEA's endowment is invested, and the investment income funds the organization.
Recently, the organization began fundraising, which Ruhe said is "very unusual for private foundations because we're considered self-funded." NC IDEA wants to increase its budget so it can fund more companies and cover the administrative cost of reviewing additional applications.
"We could see a greater return if we simply had more budget to allocate," Ruhe said. "We're trying to take that message out into the economic development and philanthropic communities within North Carolina to say, 'If you think there's value to North Carolina and the activity that we do, you can help us increase the yield by just increasing our programmatic budget.'"
Giving grants to businesses and organizations helping startups
Many foundations either operate programs or provide funding. NC IDEA is unique in that it does both, Ruhe explained.
"Our grant-making is better for what we learn in our programmatic activities, and vice versa," he said. "All of our programs and grants are targeted at helping people live up to their entrepreneurial potential, and in a broader context, make North Carolina the best state in the nation for people to start and grow firms of economic impact."
NC IDEA operates two categories of grants. Seed grants and micro-grants of $50,000 and $10,000 are provided directly to entrepreneurs or startup founders.
Grants are awarded to founders to whom the money would "at this particular time be very impactful in their ultimate success," Ruhe said. It provides assistance to get ideas off the ground or help companies scale to the next level so they can create jobs and generate tax revenue for the state. The grants don't need to be paid back, and the organization doesn't receive equity in the business.
Another category of grants is what Ruhe calls B2B, where NC IDEA supports other organizations that help entrepreneurs, such as universities, two-year colleges, cities, counties, and others. The organization has about 60 partners in its network.
Supporting underserved communities
NC IDEA recognizes that economic development in North Carolina is not a one-size-fits-all approach, and the organization strives to support underserved communities. Grants are distributed based on what's relevant in different parts of the state, whether it's educational programs, access to capital, or mentoring.
"We have to meet people where they are and help them from that starting point," Ruhe said. "The best way we could do that was the creation of this ecosystem partner program where organizations that are on the front lines in various parts of the state say, 'Here in our corner of the state, this is what's most needed.'"
NC IDEA also created the North Carolina Black Entrepreneurship Council and has committed $1 million to advance Black entrepreneurs in the state. The council and foundation will work together to identify and recommend programs, grant recipients, and partners.
Another program, NC IDEA SOAR, aims to support women in entrepreneurship. The program offers networking, professional development, and connections to resources to help female founders grow their businesses. There's also a four-week program called NC IDEA LABS that's open to anyone wanting to take their business to the next level.
SOAR and LABS are "traditional accelerator"-type programs, Ruhe said. "It's specific business-growth assistance around market valuation, customer discovery, lead generation, revenue generation - all the nuts and bolts," he added.
NC IDEA delivers its programs at no cost, but Ruhe said there's a competitive application process that involves companies providing details about its founders, the company as a whole, revenue, funding, and the type of grants they're seeking. The organization receives hundreds of applications during each application period.
Growing North Carolina's innovation footprint
Since its beginning, NC IDEA has provided about $15 million to companies and partners throughout North Carolina. Ruhe added they've supported nearly 500 companies, which have created more than 3,300 jobs and brought many benefits to communities.
Marrying innovation and entrepreneurship offers the biggest economic impact, and he said the state of North Carolina does well cultivating both. As word gets out about the state's entrepreneurial ecosystem and it keeps attracting major tech companies like Apple and Google, the region has even more potential for up-and-coming entrepreneurs.
"The greatest natural resource that exists is the entrepreneurial spirit of people," Ruhe said. "It'll be entrepreneurs who will solve our biggest problems. It's entrepreneurs who are creating the companies that create the jobs we so desperately need. That's why we do what we do."
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