Facilitating access to capital is something local governments can accomplish in a number of ways. One possibility is to set up small business funds with regional local governments, local chambers of commerce, and other ecosystem partners. These can provide bridge funding during downturns and to support other priorities, like underrepresented entrepreneurs. State-guaranteed convertible debt allows a local government to take convertible interest in the success of a project, rather than typical startup funding models that take equity and dilute ownership for underrepresented entrepreneurs in their companies. It also reduces the risk to the local government. Especially during the hard times for businesses represented by the COVID pandemic, governments may consider experimenting with this new idea.
- High-impact, High-difficulty
- Example: Buffalo, NY’s 43 North \\ The One Buncombe Fund brings together numerous regional local governments and other partners to form a centralized COVID-19 donation and relief center that provides bridge funding to small businesses during the COVID-19 crisis \\ The Brookings Institute has identified how a grant program to support Minority Entrepreneurs could help close the racial entrepreneurship gap \\ Products like WeFunder can help focus local investments in local entrepreneurs
- Next Steps: The first place to start is identify what funding challenges the entrepreneurial community is facing. Work with local chambers of commerce, accelerators, and others to identify needs and build a plan.