Fulfilling A Capital Need

When Access Ventures launched Render Capital, we explained the main efforts of the initiative. In summary, we want to help create a thriving regional economy where entrepreneurs see Louisville and Southern Indiana as a place they can find the appropriate risk capital to start and grow their business. Our approach is to provide the capital that is so crucial, yet often difficult to access, for entrepreneurs at the earliest stages of building their businesses.

The tricky part about funding businesses in a large, diverse, and dynamic regional economy is that there is no one-size-fits-all solution. For example, a small, brick-and-mortar business will require a much different funding approach than a high-growth startup. Further, a steady cash-flow model will have a much different long-term strategy than a rapidly growing model that might seek an exit. At Render Capital, we are aware of the differing strategies that are needed based on the variety of business types and models within our region. We often cite the statistic that 83% of businesses don’t take traditional funding like venture capital or bank financing. For this reason, we’re working to develop alternative capital strategies that are proven to serve the majority of founders. We know that, oftentimes, traditional financing like venture capital is not the best fit for an early-stage business. However, sometimes it is the best fit. A startup model that requires fast growth and scale with lots of upfront capital would benefit from venture-style investments. 

With that said, we believe another reason that 83% of businesses are not funded by a traditional source like venture capital is because of a lack of accessibility for most founders. Most people working in this space are familiar with the staggering statistics to back this up – nearly 75% of all venture capital is invested in California, Massachusetts, and New York, less than 3% is invested in female founders, and less than 1% is invested in black founders. Anecdotally, we’ve heard these complaints in our own region. We’ve heard that this early stage, risk capital is just too hard to come by for most founders. 

So, when aiming to help build a thriving regional economy for entrepreneurs, we knew that we needed to dedicate a portion of our strategy to address the lack of accessibility and limited prevalence of introductory, venture-style funding in our region. We needed to create a solution for the high growth startups in the Greater Louisville region that require risk capital to propel them onto a more traditional venture path. These startups need that initial seed money to build out their solutions and begin to show the traction that is so important to attract subsequent investors. Of course, we’re not the only entity that is working toward increased access to early capital in our region, and we want to build on the great strides of others in the community. We know that more funders means more capital, which means that more startups are provided with the money they need to take their companies to the next level. 

Our solution to fulfilling this specific capital need of early-stage, high growth startups is the Render Competition initiative, which invests $100,000 into eight companies each year, encouraging their growth and scalability within and beyond our region. Importantly, this initiative was crafted to be accessible and inclusive, to engage community stakeholders, and to show that our region is here to support startups. We recently wrapped up the first annual Render Competition cycle, in which we worked diligently to address these concepts, and we will continue to work toward these goals going forward. 

What We Did

This fall, we announced the inaugural winners of the Render Competition at our Virtual Pitch Event. Those eight winning startups, who cumulatively received $800,000 in investment, will be using the funds as they build out their solutions in our local ecosystem. In order to select these 8 winners, four of which are local to the Greater Louisville area and four of which are relocating to the area as a result of selection, we wanted to create a process that was accessible and inclusive to startups and founders of all types. 

This starts with a far-reaching application process that searches across the country and invites startups of all backgrounds to apply. Seed funding that anyone can apply for – no warm introductions needed. Also important, every application gets an equal chance at review from representatives serving on an external panel of over 75 judges. Ideally, this open and decentralized decision-making will limit unconscious biases and improve diversity of thought in the selection process. An added benefit for the entrepreneurs is that these judges leave constructive comments and suggestions while reviewing the applications, creating access to very targeted feedback from successful founders and seasoned investors. After three stages of evaluating over 200 competitive submissions, the final eight, well-deserving winners arose. 

What We’re Doing Now

With the winning startups hard at work innovating in our community, our next effort is to engage other stakeholders in this community to join us in supporting the companies. Our focus with this initiative was to provide more capital in our region because that is where we saw a need and felt we could be the most impactful; conversely, we never saw a big gap in startup support or mentorship. We’ve experienced, and believe that local founders also experience, a Greater Louisville startup ecosystem that is very active, welcoming, and involved in helping the early-stage companies succeed. This is evident through the many local individuals who served as volunteer judges and also through the sponsors and in-kind providers donating their efforts to this program. We believe that corporate and civic engagement is essential to building and sustaining a thriving startup community. We’re grateful to the sponsors and service providers of this program who have dedicated their time and resources to help each of the Render Competition startups thrive.

What’s Next

Now that the first annual Render Competition awardees have been determined, we are excited to watch along as they build out their products and scale their solutions. Our community of judges advanced and selected these companies because they believed in their likelihood of success. We hope that our investment, as well as the support of the local community, will play a small part in their trajectory. 

Looking ahead, we aim to increase our desired impact by investing in many more startups over the next several years.  We hope to help generate the traction that can unlock future venture capital interest in the region, and we seek to achieve this through consistent investment. For the continuation of the Render Capital fund, we will annually invest seed capital through the Render Competition initiative in order to help spark vibrancy in our startup ecosystem. We are gearing up for another nationwide application search for Render Competition 2021, and we are excited to share more information in the coming months.

In the meantime, we are looking to work with community partners and other startup supporters to increase the support and network offered to Render Competition winners. If you are an organization or individual who is specifically interested in helping these companies, we’d love to hear from you. Specifically, we are looking to add judges, mentors, service providers, and corporate and civic partners.

More generally, we are always looking for thought-partners who enjoy discussing creative capital solutions that advance entrepreneurial ecosystems. If you are interested in this work or have new or differing ideas for creating access to capital for startups, please reach out. 

The Render Competition initiative aims to help advance Greater Louisville’s startup scene into a vibrant, dense, and accessible ecosystem with plentiful capital and support for early-stage entrepreneurs. Stay up to date on this initiative and all other Render Capital projects by subscribing to our newsletter.