Founders don’t leave the State of Alabama because they want to.
They are leaving to be closer to “capital gravity,” says Chris Udall.
“In the past, founders have hit a ceiling where the local funding infrastructure couldn’t support their next stage of hyper-growth. When you’re forced to look toward the traditional hubs like Silicon Valley, Boston, or New York for Series A or Series B funding rounds, the pressure to relocate your headquarters often follows that check,” Udall told Hypepotamus.
A new $15 million fund, launching from inside Innovate Alabama, looks to retain early-stage talent in the state.
The newly-announced Capital Access Fund is designed to retain and scale Alabama’s early-stage companies while helping them unlock private investment dollars.
Get To Know The New Fund
The fund will write checks into companies in the range of $100,000 to $250,000, joining rounds from pre-seed to Series A. It will not lead rounds, and incorporates a private match component (meaning that the money will be deployed in a 1:1 ratio that comes in from corporations, individuals, or venture firms). The fund will also provide fund-of-fund investments, ranging from $500,000–$2.5M per fund.
Udall will lead the fund as the fund manager.
As an evergreen fund, returns generated by the fund will be reinvested to ensure long-term impact.
“The fund is anchored by Innovate Alabama, with capital strategically set aside over the organization’s first several years and structured to be matched with private capital. Every Innovate Alabama dollar is designed to catalyze at least an equal amount of private investment, expanding the total pool of capital available to Alabama founders,” Udall added.
Udall added that there is a sense of “urgency” around starting to deploy capital, and the Fund of Fund Request for Proposals (RFP) process and direct investment application portal were opened earlier this month.
“Our timeline is aggressive but deliberate. We anticipate the first wave of capital deployment to begin this summer. We aren’t just looking to move money; we’re looking to move the needle for Alabama’s economy,” Udall added.
So, which founders should apply?
The initiative will prioritize investments in Alabama’s core industries identified in the Department of Commerce’s CatALyst plan, including forestry, construction technology and legacy sectors, while expanding access to capital for companies in rural areas, according to a press release.