Businesses caught in the “valley of death” between seed funding and venture capital will have a new source of funding, thanks to the Milwaukee 7 economic development partnership.
The M7’s new $1 million Capital Catalyst venture fund will provide loans and grants totaling $50,000 to $125,000 to early stage companies who are working to attract the next stage of funding.
The amount of the funding that is given in grant form will depend on the startup’s development and sales progress. The M7 money could be used for product development, market validation, new equipment, marketing or sales assistance, among other options.
M7, which is particularly interested in advanced manufacturing and technology companies, plans to personalize the grant/loan awards and terms to the specific company based on where they are in the life cycle.
“We saw a need to directly support high-potential firms that have a great idea and are in the process of taking it to market, but may need some additional funds to get them to the next step,” said Pat O’Brien, executive director of M7. “The fund’s intent is to help position companies for additional investment and assist their angel investors by not diluting their position.”
A group of business accelerators and startup support organizations will advise the M7 on candidate selection. More information and an application are available at http://mke7.com/Capital-Catalyst.
The M7 is also working to provide a clearer path for startups seeking funding through a larger initiative called “Marshaling our Resources.”
BizTimes Milwaukee detailed the difficulty early stage companies face in finding funding during this growth phase in a Dec. 12 cover story.
