Alaskans are full of great ideas. We've dreamed up making facial cream out of glacial silt and turning salmon into vodka. But to make money, you need money. And that's where the 49th State Angel Fund comes in.
This spring, the Municipality of Anchorage received a $13.2 million federal allocation to establish the 49th State Angel Fund. Over the next two years, the fund will help early-stage, high-growth businesses obtain financing to seed new ventures.
Small businesses are the driving force of Alaska's economy. They account for more than half of all private-sector jobs in the state, according to the U.S. Small Business Administration. Small businesses also create much-needed new jobs. In fact, the U.S. Department of Labor reports that 65 percent of all new jobs were generated by small business over the last 17 years.
The municipality is seeking companies that have potential for "high growth" and can deliver "significant economic benefit" to our community. Applicants will be evaluated based on business strategy, management team, market analysis, products/services, job creation and financial plan.
Besides taking applications directly from businesses, the 49th State Angel Fund is taking applications from Anchorage-focused angel funds that make direct investments into companies that bolster the economy. This type of investment will help grow and strengthen the angel fund investment network and attract additional capital to Anchorage.
Mayor Sullivan has appointed nine local business and economic leaders to the 49th State Angel Fund Advisory Committee to advise him on investment opportunities.
Wells Fargo supports the 49th State Angel Fund because it helps to bridge the gap for burgeoning companies that are not able to obtain conventional bank financing. These companies often pave the way for new industry growth that may help diversify the state's economy and encourage other start-ups to do business in Alaska. This is an investment in Alaska entrepreneurs that has the potential to stimulate economic growth for generations to come.
The federal treasury -- the funding source for the fund -- will gauge the success of the effort based on whether the fund meets a "10 times leverage" goal, achieving $132 million in subsequent private financing over five years. While angel funds are new in Anchorage, this economic development tool isn't new in the United States. Maine launched a similar-sized venture fund in the 1990s and larger funds exist in cities like New York and Boston. A more recent umbrella effort in Northeast Ohio, JumpStart, was founded in 2003 and today has helped create 4,425 jobs, a billion dollars in financing and 17 investment funds.
Think of what it would mean for Anchorage to have just a fraction of that success. To get there, forming public/private partnerships is the next step. If you're an accredited investor, banking or industry expert, propose a fund. If you're an early-stage or high-growth business looking to get off the ground or expand, apply for an investment. If you're a private-sector expert, volunteer to mentor a business owner or lead a workshop. The 49th State Angel Fund can help make Anchorage a place where even more innovators and entrepreneurs dream big and take chances.
Applications for the first round of the 49th State Angel Fund are open through Aug. 5. Two more rounds will occur next year. Please contact the 49th State Angel Fund office at 343-4898 to apply or assist in the effort.
Joe Everhart is senior vice president and Alaska regional business banking manager for Wells Fargo. He has more than 20 years of banking experience in Alaska, serving in management positions from Ketchikan to Barrow.