New NKY Entrepreneurship Fund aims to support region’s founders and entrepreneurial support organizations

Kenton Hornbeck
Kenton Hornbeck
Kenton is a reporter for LINK nky. Email him at [email protected]

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Entrepreneurship is the lifeblood for regional economies across the United States, with communities relying on independent small business owners scaling up their companies into sustainable enterprises.

In Northern Kentucky, the entrepreneurial landscape has been trending in a positive direction over recent years with capital funds, advocacy organizations, accelerators and founders working in conjunction to cultivate a sustainable environment for startups to thrive. Companies such as Bexion Pharmaceuticals, Flamel.Ai, Gravity Diagnostics and Cloverleaf are all examples of success stories from the Northern Kentucky startup scene.

In order to continue advancing the region’s entrepreneurial ecosystem, Blue North, a Northern Kentucky-based entrepreneurship advocacy and resource group, is launching the NKY Entrepreneurship Fund in collaboration with Horizon Community Funds of Northern Kentucky.

The goal of the fund is to support Northern Kentucky-based entrepreneurs and organizations ranging from startups, support organizations, educational vehicles and accelerators.

“This is something that we want to make sure is supportive of all small businesses and entrepreneurs in Northern Kentucky,” said Nancy Grayson, CEO of Horizon Community Funds. “We have a very active ecosystem.”

The starting seed money for the fund comes from an initial donation by the R.C. Durr Foundation, a Crestview Hills-based endowment which supports local philanthropic endeavors in the educational, entrepreneurial and civic realms.

Cincinnati-based Main Street Ventures is the first entrepreneurial support organization Blue North is partnering with to launch their first initiative under the NKY Entrepreneurship Fund.

Main Street Ventures has distributed more grant money to startups based in Ohio due to prior partnerships with Third Frontier Ohio, so a main focus of the fund is to provide the organization with a monetary vehicle to increase their funding to Northern Kentucky startups.

The fund’s money will be earmarked for companies past the launch phase and looking to scale their business in some way.

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“It will be exclusively for earlier-stage companies,” said Blue North CEO Dave Knox. “That could be a tech company that’s very early on. That could be a coffee shop that’s looking to expand. It’s anybody that needs that capital to take them to the next level.”

Main Street Ventures has two primary grant programs: Launch and Leap Grants. The fund will match half of the total dollar amount for both grant programs.

The goal of Main Street Venture’s Launch Grant is to provide up to $10,000 worth of capital for emerging pre-revenue companies in the prototype or product stage. Companies have to show direct customer engagement to legitimize the business model in order to receive the grant.

The Leap Grant provides revenue-generating businesses with up to $30,000 of equity-free funding to scale their business and increase the odds of long-term survival. Th funding is awarded to businesses that demonstrate the potential to continue to create jobs and opportunities within the Greater Cincinnati Region.

For their first initiative, the NKY Entrepreneur Fund will provide half the total dollar amount awarded by Main Street Ventures to Northern Kentucky-based companies.  For example, if a startup receives a Launch Grant for $10,000, Main Street Ventures will provide $5,000 of the grant, while the NKY Entrepreneur Fund will supply the other $5,000.

Down The Road Spice Company is the first Northern Kentucky company that received a $10,000 Launch Grant from Main Street Ventures in early January. The fund provided $5,000 of the total grant amount.

Due to a lack of spices in the United States used to make Indian cuisine, Down The Road co-founder Mansi Shah created a business which specializes in small-batch organic masalas (spice mixtures) that can be cooked in under 30 minutes with no prep.

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Down The Road offers six different masalas which Shah sells for $14 each. In order to make the blends, Shah must source the spices and then blend them together. Due to the current scale of her business, she isn’t able to source the spices wholesale. The money provided by the Launch Grant will help Shah be able to source the spices wholesale, which will lower her cost of goods and allow the business to grow.

“The real purpose right now is to be that thing that brings more dollars to Northern Kentucky entrepreneurs, to start and grow their businesses in a way that’s really not available right now,” said Knox. “That’s why Main Street Ventures is the perfect vehicle to do this with.”

The NKY Entrepreneurship Fund partnered with Main Street Ventures in order to streamline the grant applications for entrepreneurs. During that process, entrepreneurs will identify whether or not they are based in Northern Kentucky, as well as meeting other important criteria in order to have their application selected for consideration.

Main Street Ventures Director of Community Engagement and Entrepreneur Support Abby Ober told LINK nky in a previous interview that after a company receives a grant, they go through a needs assessment to address specific areas of the business. 

Once the company completes the evaluation, targeted areas can be discussed. For example, if the company needs help with marketing, they would be connected to a marketing mentor.

As the fund matures, Knox told LINK nky the fund’s stewards have already explored adding different funding mechanisms so it won’t exclusively be financed by donations. One of these options would be adding a potential equity component for the fund.

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The model explored by Knox is inspired by SalesForce CEO Marc Beinoff’s Pledge 1%. This means a startup could leverage 1% in equity of their company’s future success in order to support nonprofits in Northern Kentucky. In this case, the nonprofit would be the NKY Entrepreneurship Fund.

“Dave Knox with Blue North and I have spent some time talking about the different ways that we can grow the fund and we think beyond just people making donations whether it’s through the website or mailing in a check or even making a gift of stock,” Grayson said. “There are opportunities for companies to even give back a percentage of equity and it’s something that we think could be a great way for those successful entrepreneurs to help pay it forward down the line for other like-minded individuals”

Of course, Main Street Ventures will not be the only entrepreneurial support organizations that can be involved with the fund. Knox hopes the fund can provide money and help for other entrepreneurial support organizations across Northern Kentucky like Aviatra Accelerators or SocapAccelerate at Northern Kentucky University.

“There are a lot of different opportunities, I think, depending on where a small business might want to get support,” said Grayson. “For me, that they are all working together I think really shows that we are wanting to make sure that we can get further faster together.”

Main Street Ventures Executive Lead Brianna Dzuricsko told LINK nky in a previous interview that around 50 to 60 companies typically apply per grant cycle, and with the entrepreneurial support organization normally accepting five to seven applicants. Funding applications for their first quarter officially close on February 13. Recipients are scheduled to be announced in March, with quarter two applications opening back up in April.

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