Winrock International introduces early-stage fund to close financing access gap in Arkansas

by Roby Brock ([email protected]) 666 views 

Winrock International announced Thursday (Dec. 10) the Validation Fund, Arkansas’ first evergreen, not-for-profit fund dedicated to deploying early-stage awards to validation-stage Arkansas startup companies.

The fund was launched with an initial $1.1 million contribution from the Walton Family Foundation.

The Validation Fund will aid in the creation of jobs and economic prosperity across Arkansas by providing essential early-stage capital to startup companies. The WFF’s contribution will fund awards of $50,000 to $150,000 in eight to 10 validation-stage companies in Northwest Arkansas over the next two years. The Validation Fund, plans to raise an additional $6 million over time to expand these efforts throughout the state.

Winrock’s Innovate Arkansas and the Delta I-Fund will provide necessary technical assistance and counseling to companies seeking Validation Fund contributions, it said.

“We are proud to help take the lead, with the assistance of the Walton Family Foundation, in addressing a critical gap in Arkansas’ entrepreneurial ecosystem,” said Winrock International President and CEO Rodney Ferguson. “From Innovate Arkansas to the Delta I-Fund and the Arkansas Women’s Business Center, Winrock provides expertise to support entrepreneurs and promising young businesses in Arkansas.”

Winrock has an established continuum of supporting capital needs throughout the entrepreneurial landscape, starting with proof-of-concept to validation, angel and venture. The lack of Arkansas capital at the validation stage is a competitive disadvantage for Arkansas entrepreneurs and limits the opportunity to build a sustainable knowledge-based economy, according to Winrock.

The Milken Institute’s State Science and Technology Index (SSTI) ranks Arkansas in the bottom quintile in the availability of risk capital. Between 2010 and 2016, Arkansas companies received only 0.051% of venture capital within the U.S., according to the SSTI.

“Winrock has worked for decades in Arkansas to build community and improve well-being, and supporting entrepreneurship is an important part of achieving those goals,” Winrock U.S. Programs Senior Director Linsley Kinkade said. “The Validation Fund, with support from Winrock entrepreneurial programming, carries on in that legacy by helping address an area of need.”

In coming years the Validation Fund plans to raise $6 million for awards in seven targeted industries: healthcare; retail; transportation, distribution and logistics; agriculture, food and natural resources; financial services; data sciences, advanced analytics and software development; and energy and power electronics.