HOW IT WORKS ↓
FOUNDER-FIRST, PATIENT CAPITAL
“Adding a ‘0’” to Venture Deals Across the Region
In 2023, The Idea Village launched a new affiliated venture capital fund called the “Momentum Fund” to invest in breakout alumni of the flagship VILLAGEx accelerator program.
The Momentum Fund was launched with $6.7 million in committed capital from 24 individual investors and family offices, including some of New Orleans and the Gulf Coast’s leading founders. Private capital is complemented by state investment through Louisiana Economic Development’s SSBCI (State Small Business Credit Initiative).
The fund, which is connected to The Idea Village but separately managed and governed, will allow The Idea Village as a 501c3 non-profit to support accelerator companies over the long-term through capital investment and to ultimately participate in the company’s success through a carried interest of profits via the investment fund.
“Momentum Fund represents a fundamental change to the way we view our accelerator programs and marquis IDEApitch pitch competition.
Having an affiliated fund means that The Idea Village now has the opportunity to have a real stake in the companies and founders we put forth, and it allows us to apply more of an investment mindset to our entire pipeline development.”
—
JON ATKINSON
CEO, THE IDEA VILLAGE
THESIS ↓
HOW COMPANIES RECEIVE INVESTMENT
To receive investment, all companies must be alumni of The Idea Village’s VILLAGEx accelerator program AND will have to meet the fund’s criteria for investment. This includes raising 2x the allocation of the fund from outside sources and receiving approval from the Momentum Fund’s investment board (see below).
Beginning with the 2024 cohort, a $100,000 investment opportunity at market terms will be made available to any company who graduates from the VILLAGEx accelerator program and meets fund requirements within 18 months of graduation. An exceptional $250,000 investment opportunity will be made available to the winner of the annual IDEApitch competition during New Orleans Entrepreneur Week each year, according to similar criteria. All companies must agree to investment terms and meet further requirements as indicated below.
The Momentum Fund intends to make investments at “market terms” (including valuation, and investment structure) as set by third-party private capital investing in a company’s open round following program completion.
INVESTMENT THESIS
The odds of success for companies that successfully complete a rigorous and selective accelerator program and raise outside capital greatly exceed those that do only one or the other.
Investors tend to see greater returns by investing in a portfolio of well-capitalized early-stage companies and when they maximize pro rata investments in later rounds to “double down” on successful startups.
MOMENTUM FUND CRITERIA
To be eligible for investment from the Momentum Fund, each company must be a graduate of The Idea Village’s VILLAGEx accelerator* AND raise outside equity capital equal to or greater than $200,000.
Complete investment terms are shared with all VILLAGEx companies during or following their time in the cohort. All companies seeking Momentum Fund investment must abide by these terms. Core investment criteria are highlighted in the box to the right.
*VILLAGEx became the official branded name of The Idea Village’s later-stage accelerator in 2019. Alumni of “IDEAx” or equivalent earlier iterations of growth-stage accelerator cohorts may also be eligible. Email innovation@ideavillage.org for more information.
Most VILLAGEx graduates will have attended all in-person events, hit milestones set with their Entrepreneur-in-Residence, developed a professional deck, attended pitch coaching, presented at Demo Day, and have received an overall positive recommendation from their Advisory Board and mentors.
CORE INVESTMENT CRITERIA
-
All companies will have successfully graduated from The Idea Village’s later-stage accelerator program in the last five years.
-
Each company must raise a minimum of $200,000 from outside investors to trigger eligibility for Momentum Fund investment.
-
For every $2 of outside investment, companies receive $1 of Momentum Fund investment above the minimum investment and up to their allocation cap.
-
Funds allocated to companies that do not raise a qualifying round within 18 months of VILLAGEx graduation or IDEApitch prize winnings will be reallocated.
IDEApitch ↓
MOMENTUM FUND + IDEApitch
In addition to being one of the region’s industry-leading and much beloved pitch competitions, IDEApitch will now become a way for VILLAGEx alumni to compete for a larger investment allocation, in addition to showcasing their startup live on stage to a broader audience of investors, peers, and startup community.
Each year, three companies will be selected to compete in the IDEApitch program as “finalists.” While all remain eligible for the $100,000 investment opportunity through Momentum Fund, the grand prize winner will be eligible for a $250,000 investment prize through the Momentum Fund. All IDEApitch recipients are still subject to the same criteria and terms and conditions as Momentum Fund’s other investments.
FOLLOW-ON INVESTMENT OPPORTUNITIES
All companies that receive an initial investment from the Momentum Fund may be eligible for additional follow-on investment in a subsequent up-rounds at a later date and at the full discretion of the fund.
Companies for which the fund has already made an investment that intend to raise at least $1M in a subsequent round should contact The Idea Village to discuss subsequent funding.
CURRENT TERMS & CONDITIONS
For more information on the full Terms & Conditions associated with all stages of Momentum Fund investment, see the most current document of all terms and conditions here.
GOVERNANCE
The Momentum Fund is governed by an independent investment board, composed of 3-5 members at any given time who are tasked with overseeing the implementation of the investment thesis and directing decision making for follow-on rounds. The governing board must approve every investment and can reject an investment with unacceptable terms. As a new entity, the Momentum Fund is only open to accredited investors by invitation.
The Momentum Fund is wholly owned by The Idea Village and receives additional operational support by The Idea Village team.
MOMENTUM FUND INVESTMENT BOARD
JON ATKINSON
President and CEO
The Idea Village
RICK SPENCER
Managing Partner
Growth Factory Ventures
PAT RILEY
President
Morrow Global Network
INVESTING IN THE FUTURE OF THE GULF SOUTH
The Momentum Fund is designed to provide accelerator companies with a source of founder-friendly, patient capital that can help “add a ‘0’” to the types of venture deals being done in Louisiana and across the Gulf South. We believe that great companies can be built here and want to be part of supporting founders in that journey.
While the terms above remain subject to change, we are endeavoring to lay out as many of the expected terms and conditions for investment as possible upfront in an effort to build a road map that companies and founders can follow.
We hope that the prospect of investment from the Momentum Fund will help provide additional validation in the market, making fundraising easier and faster, and help founders think bigger while focusing on building an industry-leading business. We also hope that it will foster a long-term relationship between The Idea Village and alumni for decades to come.
To learn more about Momentum Fund,
contact innovation@ideavillage.org
