Imagine having all the money in the world, in your hands, at your disposal. It’s given to you with the trust that you will make wise investments and fund the future of successful startups and entrepreneurs.
This is the challenge IDEA’s Investment Officer Matthew Saitta and his Investment Committee face as they prepare to award the most grant money ever since IDEA’s inception.
This year, IDEA: Northeastern’s Venture Accelerator is embracing one of its greatest goals to date: granting over $200,000 to promising ventures coming out of the Northeastern program. The funding process, facilitated through the Gap Fund, gives ventures the opportunity to apply for up to $10,000 per round and is designed to “close the gap” in business development. Funding is awarded to ventures after a month-long review of their business plan, milestones, and capital needs. Add in the Prototype Fund, a competition that awards $1,000 grants to promising prototype concepts, which brings a total of $245,000 that IDEA will grant to Northeastern students, alumni, and faculty.
Gap Funding is one of IDEA’s signature programs designed to help launch ventures into a successful business and onto the next level. Ventures in the Go stage apply for funding by submitting a financial plan, which is then reviewed by the Investment Committee. The IC then determines which ventures pitch to the Advisory Board for capital. Identifying ventures to receive funding is one of the toughest tasks the IC has to accomplish.
“We aren’t just giving money for the sake of giving it away. We want them to have a sustainable plan because we are funding businesses with alumni-donated funds,” says Saitta. “Our biggest challenge is making sure we are funding the right ventures.”
Saitta and his committee first identify the major needs for capital of each venture applicant. Saitta distinguishes what they’ve accomplished, their outlined goals, and how gap funding fits in their picture. For some, gap funding is the perfect fit, but for others, it’s not. Most importantly, Saitta wants to ensure that gap funding isn’t all about money, but equally a constructive learning experience.
“We are funding ventures that we anticipate are going to be successful. If they succeed, we are successful, but if they fail, we need to make sure that they learn from those failures. Our return is a function of the success of the venture and experiential learning. We want our Gap Funding to be a win-win. This is our goal.”
To date, IDEA has funded $200,000 to ventures through Gap Funding. As IDEA grows, the landscape of funding participants has transformed to include new industries, new groups, and new college representation.
As a startup itself, IDEA’s Gap Funding has evolved dramatically over the past year. For Saitta, he cherishes the future of this program through a personal framework.
“Meeting with the ventures and lending them a hand inspires me to continue helping them progress through the Gap Funding process. The opportunity to invest in our ventures and help them succeed and grow, both as a business and as people, is where our work at IDEA is truly valued.”