After receiving the promise of $2 million from ConAgra Foods Inc. — pending approval of The Cannery project — Capitol Corridor Ventures has decided to forward $600,000 on to other segments of the Davis technology community.
CCV announced this week it would pledge $250,000 to Davis Roots, a local tech-startup accelerator; $100,000 to Hacker Lab, a Sacramento-based software and hardware inventor-community looking to find a home in Davis; and $250,000 to help the city identify a location for a wet lab — facilities that tech-sector interests in town say have long been missing in town.
David Morris, CEO of Capitol Corridor Ventures, said this set of commitments highlights an “increasing momentum of organizations that support Davis tech entrepreneurs.”
Morris also is the managing director of techDAVIS, the local tech-business association that earlier this year helped the city hire Rob White, Davis’ chief innovation officer.
“We are very fortunate to have so many positive entrepreneurial activities happening in Davis right now, and it is important that we continue to build on this momentum,” Morris said in a news release. “This pledge is intended to provide a boost to the Davis tech ecosystem that will have long-term impact.”
The $2 million deal brokered three years ago between Morris and ConAgra, the food giant proposing The Cannery project, received much public scrutiny last month after the agreement became public. Morris was the individual who had proposed swapping properties with the city earlier this year for land north and east of the Mace curve in hopes of developing the farmland into a tech-business park.
Representatives of ConAgra said their motivation for the deal merely was to make an investment into the local economy. Morris said the money was to help jump-start his overarching $20 million plan that revolves around providing seed-stage funding to a multitude of local tech-startups.
Despite the new commitments to the various tech-business entities, it doesn’t appear that that plan has changed.
Morris said in the news release that CCV is still in the midst of launching a nonprofit venture capital fund to provide financing for very early‐stage technology outfits, which would offer $50,000 to $100,000 to “a portfolio of 10 to 20 startups.”
Morris expects those startups primarily to spin out from UC Davis, Davis Roots, Hacker Lab and the Davis Wet Lab Incubator, with the hope that they would grow and expand in Davis.
As a nonprofit venture capital entity, all capital gains created by the nonprofit would be recycled back into the organization to seed future tech-startup companies.
“The idea to make a focused effort to help organizations that increase the number and quality of financeable startups launching in Davis has been under consideration by CCV for many months,” White said in a statement. “It is exciting to see this initiative move forward with these commitments to Davis Roots, Hacker Lab and the wet lab incubator.”
The funding granted to Davis Roots, which was established last year and now is assisting its second round of startups, will be used to ramp up its administrative capacities, and also offer some seed-investment capital to startups accepted into the program.
“Money is obviously one of the key ingredients to building a strong local ecosystem of startup companies,” said Anthony Costello, co‐founder of Davis Roots, in a statement. “We need money to run these programs and our startup companies need money to scale their operations. We’re fortunate that groups like CCV are willing to generously support that aspect of our program at Davis Roots.”
Hacker Lab, meanwhile, has had a difficult time finding a place to set up shop in Davis. Gina Lujan, the co-founder and director of the Sacramento-based tech community, says this $100,000 investment is a “great step forward in bringing its organization to Davis.”
The pledge from CCV, over two years, will help Hacker Lab identify a source of funding to lease a facility and start its operations here. The entity is looking to open in Davis in 2014.
“Hacker Lab is very excited to have reached our first major milestone with a generous offer of support from Capitol Corridor Ventures,” Lujan said.
Morris said the last piece of this pledge, an effort aiming to open wet lab incubator space in Davis, has been a high priority for the local research community for years. Ag and biotech startups have a difficult time finding this type of facility due to the high cost of lab space and equipment.
The goal here, Morris said, is to challenge potential donors to provide matching funds for the lab, with a minimum fundraising goal of $1 million, to help secure an appropriate location and a qualified operator. The money also would help “develop a definitive program for the incubator and identify the additional funding and resources that will be necessary to make a wet lab incubator a reality.”
“Davis needs wet lab incubator space,” said Pam Marrone, CEO of Marrone Bio Innovations, in the release. “It’s critical that we get this done. New startups spinning out of UCD routinely get stalled trying to find wet lab space in the city.”
— Reach Tom Sakash at [email protected] or 530-747-8057. Follow him on Twitter at @TomSakash