RALEIGH – The North Carolina Rural Center has introduced a new program, the NC Venture Capital Program, and has received up to $50M for the program, according to the NC Rural Center website.

But the new program won’t distribute funds directly to small businesses; instead, the program will seek partners—venture capital (VC) funds, limited partners (LPs), and investors—to distribute the funds.

“The program will invest in venture capital funds as limited partners,” says Rodney Sampson, SSBCI Venture Capital Fund of Funds Manager at the North Carolina Rural Center, in an email interview. “And the funds will then invest the money in North Carolina venture backable firms.”

Venture funds and accelerators that make investments in high-growth companies can download the RFP and apply for funding through an online form.

The program also focuses on “Socially and Economically Disadvantaged Individuals” or “SEDI.”

Committing 54% of funds to SEDI-qualified

According to Sampson, the NC Venture Capital Program is committed to investing at least 54.12% in majority-SEDI-owned firms.

Section 8 of the US Small Business Act defines SEDI with these two qualifications:

  • Socially disadvantaged individuals are those who have been subjected to racial or ethnic prejudice or cultural bias because of their identity as a member of a group without regard to their individual qualities.
  • Economically disadvantaged individuals are those socially disadvantaged individuals whose ability to compete in the free enterprise system has been impaired due to diminished capital and credit opportunities as compared to others in the same business area who are not socially disadvantaged.

“Over the last fifty years or so, socially and economically disadvantaged individuals who start venture backable companies have struggled to raise less than 1% of all private venture capital,” Sampson told me in an email interview. “The Biden-Harris Administration’s renewal of the Obama Administration’s $10 billion State Small Business Credit Initiative has the potential to change that.”

Crucial advice for entrepreneurs: Never choose your market first – here’s why

The website also states that the program is part of the larger NCInvest initiative, which received nearly $202 million in federal funding to support small businesses throughout the state. The NC Venture Capital Program received up to $50 million from the federal State Small Business Credit Initiative (SSBCI) to support these NC small businesses with equity investments.

“The State of North Carolina’s commitment to invest up to $50 million of its allocation in venture funds who must invest over 54% in majority SEDI owned firms is a game changing model for equitable opportunity in our nation’s startup ecosystem,” said Sampson.

Learn more on the NC Rural Center website: www.ncruralcenter.org/lending/ssbci/nc-venture-capital-program.

“As the Venture Capital Fund of Funds manager for the North Carolina Rural Center, I encourage venture funds throughout the state and beyond who have a proven track record in investing in this asset class and SEDI high growth companies to apply,” said Sampson.

According to the NC Rural Center website, applications will be accepted on a rolling basis, with the first round closing on May 5, 2023, and the first announcement of fund partners on June 30, 2023.