Inland Empire start-ups: There are nearly $500k in microgrants available. Do you qualify?

Five years into supporting mission-driven entrepreneurs in the Inland Empire, for profit and nonprofit alike, one thing has become clear for Caravanserai Project: regardless of its potential to drive system change and build successful businesses, the access of early-stage social impact innovators to seed capital is very scarce.

Yet things are about to change as seed investments are available due to programs like the California Dream Fund Program that Caravanserai Project joined this February, thus offering access to almost $500,000 in unrestricted grants to IE start-ups.

It is no secret that angel investors do not prioritize start-up mission-driven entrepreneurs whose work is perceived as riskier and the return on investment is less of a financial nature. This is especially true in a region like the IE that attracts limited seed capital anyway. We have witnessed this over and over as the start-ups joining Caravanserai Project’s eight-month mission-driven pre-accelerator, SEED Lab, struggle to secure seed funding.

While some get initial support from the network of funders to which they have access as part of the program, many mission-driven for-profit and nonprofit entrepreneurs fall short in getting their ventures to the next level. In many cases, it is their commitment to a mission that keeps their ventures alive. Without seed capital, their journeys cannot advance very far, regardless of how promising financially and from a social impact point of view they might be.

The California Dream Fund Program, a one-time $35 million grant program that provides microgrants to seed entrepreneurship and small business creation in California, is a very timely support to any start-up entrepreneur in the state. Caravanserai Project joined this initiative as a provider of technical assistance thus facilitating the access of almost 60 early-stage entrepreneurs in the IE to capacity building programs and up to $10,000 in seed investments.

“Access to capital is critical for small business success,” said Tara Lynn Gray, California Office of Small Business Advocate's director. "And when matched with technical assistance, it can make the difference between success and failure for small businesses and entrepreneurs, especially those who are under-resourced to begin with. California’s stellar TA network is uniquely qualified and well-positioned to provide services to diverse groups and communities across the state. Moreover, small businesses help make their communities stronger and more diverse.”

As part of this state-wide initiative, Caravanserai Project focuses on those start-ups which prioritize the betterment of their communities as part of their business strategy. We strongly believe that mission-driven for-profits and nonprofits play a vital role in the small businesses network — which in California alone includes an estimated 4.2 million of such ventures employing 48.2 percent of California’s workforce, according to Gray.

The mission-driven ventures do not only contribute to the economy, their focuses are irreplaceable drivers of systemic change. The COVID-19 pandemic reconfirmed their essential role, as in numerous cases mission-driven for profits and nonprofits have been the only support underserved and marginalized communities relied on during these challenging times.

To change the perception that mission-driven ventures are less business savvy, throughout our work with these entrepreneurs we have focused on developing solid and long-term business plans that deliver both on the social impact front as well as the financial one.

The Business Readiness Program we designed for the Dream Fund includes a series of workshops and one-on-one consulting sessions and provides the incipient support any start-up entrepreneurs need: to develop a clear mission and vision, to understand customer discovery and the competition, to build comprehensive business plans and to rely on convincing and grounded financial assumptions.

The 60 entrepreneurs that are selected to join the Caravanserai Project Business Training and graduate are eligible to receive up to $10,000 as part of the California Dream Fund Program.

“No money, no mission” is one of the first things we share with the mission-driven start-ups Caravanserai Project supports. For-profit or nonprofit entrepreneurs, the Dream Fund is a unique opportunity for them to acquire early financial support and technical skills to grow their ventures and contribute to the equitable and sustainable progress in the IE.

To learn about the California Dream Fund Program and join the Caravanserai Project Dream Fund initiative, visit caravanseraiproject.org/dream-fund. An info session is scheduled for Feb. 28 at 9 a.m. PT. For more information, contact Graciela Moran at graciela@caravanseraiproject.org.

Mihai Patru is executive director at Caravanserai Project and entrepreneur in residence for Social Impact at UC-Riverside.

This article originally appeared on Palm Springs Desert Sun: Inland Empire start-ups: Nearly $500k in microgrants are available