The brand new Venture Jobs Foundation is just like any other charity.
"This one just happens to be providing early stage capital," says Denny DeLeo, the foundation's president and director.
The goal is to invest in small businesses that can spark "community renewal" in the greater Rochester area.
"We either will be investing in businesses that can locate in neighborhoods that have been in decline," DeLeo says, "or businesses that can provide job opportunities for lower income groups."
According to DeLeo, the foundation is a nationwide first: A nonprofit venture fund designed solely to foster job growth.
DeLeo was joined by Monroe County Executive Maggie Brooks and other officials at the Henrietta offices of 5LINX Enterprises Wednesday morning. There, the foundation was presented with its first donation: a $50,000 check from 5LINX.
The foundation will tap donations from companies and wealthy individuals, according to DeLeo, a founding partner of the Rochester-based venture capital firm Trillium Group.
DeLeo says the foundation's 501(c)(3) nonprofit status is its key innovation.
The fund's investors are actually donors - who are then entitled to favorable tax treatment, in lieu of a return on investment.
But the nonprofit status also means the foundation can accept grants from local municipalities.
"This is another tool now that we have to spread the wealth, so to speak," says Carlos Carballada, Rochester's commissioner of neighborhood and business development.
"A foundation like this allows us to extend our capacity to create jobs in the community," County Executive Brooks says. "They are really going to fill a void that government can't."
DeLeo refused to disclose the foundation's internal financials.
He says it's too early to tell how much of the foundation's funding will come from public sources as opposed to private.
The fund will invest in early stage companies meeting three key criteria:
- Financial responsibility,
- existing customer revenue
- and the ability to add significant new jobs.
DeLeo says the fund's main strength is its flexibility.
"Because of our charitable purpose we will be able to do much more than what a classic venture fund could do," DeLeo says.
"(For-profit venture funds) need those companies to be growing revenue at 30, 40, 50, 100 percent per year so that they can create value for their investors.
"We will not require that level of growth. Our mission is to create jobs."
DeLeo says the foundation will make its first investments by the end of the year.