The 4th F Fund from the Montana Bioscience Cluster Initiative Now Open to Montana Bioscience Companies

Objective:

The objective of the 4^th “F” Fund (4FF) is to provide direct assistance to Montana bioscience entrepreneurs, startups, and small businesses in need of money for travel to key conferences, small equipment purchases, or temporary staff assistance in relation to proposal development, ect. This fund is designed for maximum flexibility in support of new and established businesses and entrepreneurs in the bioscience industry.

Background:

Many, if not most, startup ideas require some small level of expenditure in order to better define, refine or validate their business, product or service ideas. Expenditures may relate to activities such as:

• Market research activities (including costs of trips to trade shows, potential customers or suppliers)
• Product design, prototyping or testing
• Patent searches or provisional patent applications
• Legal costs

These “proof of concept” activities precede startups being able to demonstrate viable products and services to customers that might otherwise result in orders and revenue. With orders a startup may be able to gain funding via customer prepayments or from angels, banks or other investors willing to invest on the basis of customer commitments.

Entrepreneurs and innovators can and do put sweat equity and their own money into such “proof of concept” activities and call on friends and contacts for help to minimize such costs. But such endeavors can only take them so far. At which point startup founders often turn to the so-called “3Fs” of friends, family and fools to source funds to cover these startup activities.

In Montana however, low income levels mean that many bioscience entrepreneurs have no, or little, access to 3F funding. The 4th F fund would address this need and gap.

4FF Format:

The initial 4FF format would be a grant program. The regulatory burden and costs associated with any form of lending or investing prohibit alternative formats at this stage, although such formats will be explored in the future depending on the interest levels and success of the grant format.

The fund will provide grants of $250 to $5,000. In exceptional circumstances the fund may consider larger applications. Grants may be awarded in phases (e.g. $1,000 initially with additional $1,000 on achieving specific milestone).

4FF Eligibility Criteria:

• Open to all bioscience entrepreneurs in Montana
• Open to for-profit, not-for-profit and social entrepreneurship ideas

Evaluation Criteria:

4FF will favor grants to applicants that demonstrate the following:

• Prior commitment of time and resources to researching or developing the idea
• Evidence that the entrepreneur or team has sought guidance from the Montana Bioscience Cluster Initiative
• A clear rationale, purpose and budget for the requested funding
• Outline plan for continued development and commercialization following the completion of the funded activities

In some circumstances the 4FF funding committee may propose a grant award conditional on the applicant demonstrating additional progress in line with the above criteria.

Recipient Obligations, Requirements & Requests:

• Requirement to have a legal entity to receive the grant funds
• Obligation to account for expenditures funded by the grant.
• Obligation to share insights and lessons learned
• Request to consider contributing funds to the 4FF in the future if the venture experiences a future significant funding event or achieves significant profitability.

Governance:

• The 4FF will be operated and administered by MonTEC and overseen by the Montana Bioscience Cluster.
• A grant award committee will be established by the Montana Bioscience Cluster and responsibility for grant awards will be delegated to the grant award committee.
• The funding committee will meet monthly to review applications, or as needed.
• The funding committee will be responsible for determining how available funds are distributed over any given period.

Link to application:

https://montec.submittable.com/submit/140901/montana-bioscience-cluster-4th-f-fund-application