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Venture Capitalists Turn To 'microfunding' For Entrepreneurs

Written by Ken Gaebler
Published: 4/30/2010

The world of venture capital is seeing a new trend of smaller investments for more entrepreneurs.

Angel investors and venture capital firms around the country are changing how they invest in small businesses, says Jon Blankenship, writing for the Christian Science Monitor. While the traditional investment model involved large investments in a small number of high-potential companies, Blankenship says a trend is emerging where smaller amounts of seed capital known as microfunds are invested with a larger number of entrepreneurs who show promise.

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The venture capital firm Solidus has joined with a group from Nashville's entrepreneurship community to create JumpStart Foundry, a microfund to support local small business owners and accelerate startups in the region. Between 10 and 14 entrepreneurs will be selected for the program over the next year, Blankenship says.

Solidus' president, Townes Duncan, told the paper that the fund "intends to help launch or 'jump-start' emerging new business concepts. Further [it] will also act as a foundry by leveraging our experienced group of founders to help mold the concept into an exciting, emerging business."

There was additional investment news for entrepreneurs this week, as Dow Jones VentureSource reported a 13 percent increase in investment around the world. During the first quarter of 2010, venture capitalists invested a total of $7 billion in 919 deals worldwide.

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