Virginia Gov. Glenn Youngkin on Monday introduced a new multimillion-dollar initiative that will pair federal grant money with matching funds from venture capital firms to fuel “innovation-driven startups and entrepreneurial ecosystems throughout the commonwealth.”
The Virginia Innovation Partnership Corp. will oversee the new Virginia Invests program, which will leverage millions in funds already awarded to the commonwealth through the U.S. Treasury Department’s State Small Business Credit Initiative. The VIPC will direct the funding to seven venture capital funds that will match the money to create a tranche of more than $100 million.
About 100 Virginia-based startups are expected to receive funding in the next three to five years through the program.
The governor's office said the new initiative should accelerate capital that’s invested into Virginia startups and help groups that struggle to get funding, including women, veteran, Black, Hispanic and rural-based entrepreneurs.
The seven selected VC firms also focus on founders who are typically underserved. They include Arlington’s 100KM Ventures and AIN Ventures; Hampton Roads-based The BFM Fund; Chapel Hill, North Carolina’s Idea Fund Partners; Atlanta’s Valor Ventures; McLean’s Veteran Ventures Capital; and The Artemis Fund, which is based in Houston and New York City.
Under the agreement, the firms not based in Virginia are required to provide 1½ times the funding they receive from the state, while the Virginia-based VC firms will make a dollar-for-dollar match.
The VC firms specialize in a variety of sectors, including health and life sciences, national security and defense, fintech, AI, software, cybersecurity and automation. And the emphasis of the respective firms span from angel and pre-seed to Series A and growth rounds.
“VIPC’s Virginia Invests is an empowering step in connecting capital with opportunity and expanding access to investment avenues for Virginia’s diverse entrepreneurs and founders,“ Joe Benevento, the new president and CEO of VIPC, said in a statement.
The initiative would seemingly take the decision-making process of who receives the funding out of the hands of state officials and instead allow the tapped VC firms, who are regularly looking for investments, to make that call. The VIPC began the process of selecting the seven VC firms last year.
Youngkin was himself at venture capital executive at D.C.’s The Carlyle Group before mounting his campaign for governor.
Virginia was allocated $176 million from the State Small Business Credit Initiative in 2022, a program to support small businesses and entrepreneurship with capital and technical assistance. About $40 million from that tranche will be used for the Virginia Invests program, with the VC firms committing another $60 million.
The remainder of the SSBCI funding will go toward small business initiatives.
