Editor’s note: The following is press release from The Mill. Bloom has republished it here with minor edits for clarity and style.
Over the last six months, five startups have received investment from a new member-managed capital fund run by The Mill, a nonprofit center for entrepreneurship. The Flywheel Fund launched in the summer of 2020 and planned to make 4 investments of $25,000 each over the course of a year. By January, the fund had exceeded expectations, investing $120,000 in five companies in less than six months.
Flywheel is a member-managed fund that invests in early stage and high-potential companies. Rotating cohorts of members join, each contributing $10,000 to the fund upon joining. The group meets every other month to listen to one pitch, and each member then votes on whether to invest. When a majority votes “yes,” the company receives an investment of $25,000.
“Our first cohort was really excited about this opportunity to support startups in southern Indiana,” said Pat East, executive director of The Mill. “So we started with a bigger pool to invest than we expected—$120,000—and we were able to invest quickly in some very promising startups.” Flywheel Fund is open to first-time investors and includes an educational component to support them in learning how the investment process works, what to look for in a pitch, and what to expect in terms of a return on the investment.
“Flywheel Fund is committed to providing equitable access to critical startup capital,” East noted. “We’ve promised that at least 13% of our investments will be in companies with Black founding teams, and I’m proud that in our first year we exceeded that promise and invested 20%. Diversity is a matter of ethics, and it’s also a matter of economics. It’s simply better for our fund to invest in all the great ideas that could fuel our community’s future economy. When we’re inclusive about our approach, the possibilities for everyone are really limitless.”
The five companies who received investment are:
· Stagetime, an online professional network for the performing arts.
· Civic Champs, an app for nonprofits that automates volunteer management.
· Boost, an app that helps students manage and meet assignment deadlines.
· Qualifi, which allows HR professionals to conduct very high volumes of phone interviews quickly.
· Flowaste’s data analytics provide cafeterias, restaurants, and individuals actionable insights on food waste patterns
The second cohort of Flywheel Fund starts April 1, 2021. Given the success of the first cohort, East expects the second cohort to be significantly larger in terms of members and the total investment pool. “Word is getting out about the high-quality startups we have in our region, and investors want to get in on that opportunity,” East said. “The Mill is thrilled to help grow resources for startups and a new pool of angels and investors.”
