Kansas Center for Entrepreneurship

Kansas Capital Multiplier Loan and Venture Funds

Kansas City Lender SummitFederal Reserve Bank of Kansas City

August 19, 2011

Presented By:Corey Mohn, Director of Statewide

ProgramsNetWork Kansas

Where We Are Today…

…And What Used to Be Here

NetWork Kansas

Principle Outcome/Our Priorities: Establish an organization to accomplish the following:

Serve as a central portal to help connect entrepreneurs with public sector business-building organizations

Increase availability of capital in rural areas Assist regional and community organizations in

providing seed funding for entrepreneurs Promote business startups and expansions

A Service of the Kansas Center for Entrepreneurship

“NetWork Kansas”

NetWork Kansas

•Referral Center– Central portal of resources for entrepreneurs

•StartUp Kansas – Statewide supplemental capital source in

partnership with public and private lenders

•Economic Gardening Pilot– High-level technical assistance and custom data

for 2nd stage businesses

Current Statewide Initiatives

“NetWork Kansas”

NetWork Kansas

•$1.5 billion nationwide to strengthen lending to small businesses (500 employees or less)

•Matching program – 10x leverage on private investment, including bank loans and applicant equity

•All states eligible to apply for funding in 2011

State Small Business Credit Initiative (SSBCI)

“NetWork Kansas”

NetWork Kansas

•Kansas award announced June 2011

•$10.5 million for the Kansas Capital Multiplier Loan Fund

•$2.6 million for the Kansas Capital Multiplier Venture Fund

•Loan and Venture Funds administered by NetWork Kansas in partnership with the Kansas Department of Commerce

SSBCI in the State of Kansas

“NetWork Kansas”

NetWork Kansas

•Loan minimum of $10K and max of $250K on Multiplier portion (minimum total deal of approximately $111K)

•9% match on private equity, including bank loans

•Loan term is 5% up to 15 years

•Currently accepting applications from NetWork Kansas resource partners

•Multiplier Loans will be subordinate to private capital and be administered by certified development companies who are NetWork Kansas partners

Kansas Capital Multiplier Loan Fund

“NetWork Kansas”

NetWork Kansas

•Investment minimum of $25K and max of $250K on Multiplier portion (minimum total deal of approximately $278K)

•9% match on private equity per round, including angel funds

•Two applications have been approved: currently accepting applications from NetWork Kansas resource partners

Kansas Capital Multiplier Venture Fund

“NetWork Kansas”

NetWork Kansas

•Application submitted by funding partner at www.networkkansas.com

•Financial Review Loan or Venture Board reviews the application and approves or denies funding

•Capital Multiplier dollars provided to the business through the partner (loan deals) or directly to the business (venture deals)

•Partner collects any loan payments and distributes Capital Multiplier portion back to NetWork Kansas

Kansas Capital Multiplier Process

“NetWork Kansas”

NetWork Kansas

•Funds are subordinate to private capital

•Multiplier uses of funds include working capital, business acquisitions, and inventory financing among others

•Closing costs are partially paid by NetWork Kansas

•Augments risk by providing avenues for capital beyond collateral (Example: StartUp Kansas 62 bank loans, 1 failure)

Benefits to Lenders

“NetWork Kansas”

NetWork KansasA Service of the Kansas Center for Entrepreneurship

NETWORK KANSAS

• 1-877-521-8600• www.networkkansas.com

Corey Mohn785-296-6611

cmohn@networkkansas.com