Most of the scholarships will be awarded to VC fund managers in Nebraska, Iowa, Kansas and Missouri.
The goal, according to a press release, will be “to enhance capital-formation expertise across the Midwestern United States and support Kansas City as a regional hub for investor networks.”
“Our research released today shows signs that new sources of capital are emerging outside of traditional geographic hubs,” said Wendy Guillies, President and CEO of the Kauffman Foundation, in a press release.”Our work with Kauffman Fellows provides access to an extensive network of thought leaders who will be invaluable resources as we work to solve the Midwest capital gap.”
Capital beyond the coasts
Local early stage capital in a region provides an array of benefits for entrepreneurs.
“Running out of capital is a highly common way for an early stage business to fail,” said Scott Bernstein, Vice President of Lewis & Clark Ventures in St. Louis. “Local funders are often important to founders for a number of reasons, including a better culture match, a deeper knowledge of the local business landscape, and less of a likelihood that they will be asked to relocate to a distant and potentially high cost part of the country.”
Unfortunately, the vast majority of venture capital flows into only three states: California, Massachusetts and New York, according to Victor Hwang, Vice President of Entrepreneurship at the Kauffman Foundation and a Kauffman Fellow.
“It’s a playing field that’s not level for entrepreneurs who are trying to build companies,” said Hwang. “One of the key objectives of our work is to level that playing field.”
Next generation VC
The twelve scholarships will be awarded over the course of three years, beginning in 2017.
Each year two scholarships will go to the Kansas City community; two to Nebraska, Iowa, Kansas, and Missouri; and one to the “mid-continent region” between the Rocky Mountains and Appalachians.
The 20-year-old Kauffman Fellows Program is a two-year venture capital and leadership development program based in Silicon Valley. Today there are 500 Fellows worldwide leading more than 200 venture capital firms.
In the past, the Fellows have been predominantly from the Silicon Valley area. This new scholarship aims to change that.
“What we’re doing with these scholarships is to bring in people who have high potential to become the next great wave of investors in the Heartland and connecting them, training them, and pairing them up with the most successful, most sophisticated investors in the world,” said Hwang.
The Kauffman Fellows program and the Kauffman Foundation scholarships are open for applications on a rolling basis.