Community Development Financial Institutions (CDFI) Fund announced it has again awarded Launch New York (Launch NY) $225,000 in funding.
CDFI is part of the U.S. Department of the Treasury. It marks the third consecutive year that CDFI has awarded Launch NY funding.
Buffalo–based Launch NY says it is upstate New York’s “first and only” venture-development organization to provide pro bono mentoring and capital access to high-growth startups across New York’s 27 westernmost counties.
The counties include Broome, Cayuga, Chemung, Cortland, Madison, Onondaga, Oswego, Seneca, Schuyler, Steuben, Tioga, and Tompkins counties in the CNYBJ area, per the Launch NY website.
The CDFI Fund in 2018 awarded Launch NY $168,000. In 2017, the Treasury Department gave Launch NY the CDFI certification. It’s a designation given by the CDFI Fund to specialized organizations that “deliver financial solutions in economically underserved areas.”
This year’s $225,000 CDFI Fund award is allocated to Launch NY’s nonprofit seed fund. The seed fund is designed to support investments in startups in what is known as an “evergreen cycle,” which recycles returns to the fund to continue providing capital to new ventures in the future.
It’s fueled by grants and donations, and provides between $25,000 and $100,000 in investment capital to companies who meet Launch NY’s criteria, the organization said.
Launch NY currently has 45 seed-fund companies, with more than 73 percent of them located in low-income and economically-distressed communities. In total, they’ve created over 200 jobs in the region, and 42 percent are minority and/or women-led.
“Since 2016, Launch NY has invested over $2.2 million in 45 of Upstate New York’s most promising startups,” Marnie LaVigne, president and CEO of Launch NY, said in a statement “We have seen our portfolio companies create over 200 jobs and attract more than $25.9 million in co-investment and follow-on capital. With over 73 percent of our portfolio companies located in low income and economically distressed communities and over 40 percent in women and/or minority led companies, it is gratifying to see that we’re achieving our mission of inclusive economic prosperity where it is needed most.”
Recipients of the seed-fund awards include “high-growth potential” companies who have worked with Launch NY’s mentors, known as entrepreneurs-in-residence. That relationship prepares the companies for Launch NY’s “rigorous” investment process that “not only helps entrepreneurs achieve key milestones in their business, but also to position them for follow-on funding from other investors.”
Contact Reinhardt at ereinhardt@cnybj.com