By Todd Cohen
DURHAM, N.C. — In 2006, Durham transit-technology maker TransLoc was in the first group of startups to receive seed funding of up to $50,000 each from the NC IDEA Foundation, created in 2005 by MCNC, which endowed the new organization with nearly $40 million the communications network had generated in income from its investment in other companies.
In January, TransLoc was acquired by a wholly-owned subsidiary of Ford as part of its push to develop self-driving vehicles.
“The nation’s greatest untapped resource is the entrepreneurial potential of the masses,” says Thom Ruhe, CEO and president of Durham-based NC IDEA. Yet, despite “so many ideas of high potential, full promise is never seen by humanity because they don’t get a critical infusion of capital and assistance to prove the potential of the idea.”
NC IDEA, which began as a program of MCNC and in 2015 became an independent private foundation, works to unleash entrepreneurial potential throughout North Carolina by providing direct support to entrepreneurs and to local organizations that focus on supporting them. Unlike most if not all other similar groups in the U.S., NC IDEA charges no fees and takes no equity stake in the companies it supports.
NC IDEA operates with a staff of five full-time employees and an annual budget of $2.5 million through income generated from its endowment from MCNC that now has grown to roughly $50 million.
Since it began providing seed funding, NC IDEA has awarded a total of $5.8 million to 126 companies that have created 1,100 jobs and raised over $160 million in private investment and $58 million in government grants.
It also offers an “accelerator” program that has provided a 10-week curriculum to 130 startup companies that have created 650 jobs and raised over $20 million in private investment and $5 million in government grants.
And it offers a program that has provided mentoring to 17 female entrepreneurs whose companies have created 65 jobs and raised $12 million in private investment and $2 million in government grants.
NC IDEA also provides a six-week curriculum, followed by 12 months of mentoring, for entrepreneurs looking to grow companies that have been in business for five to seven years but have become stalled and may not yet be profitable.
And it coordinates a network of organizations in communities throughout the state that focus on supporting local entrepreneurs, and coordinates peer-to-peer assistance and the sharing of best practices among those support groups.
For individual entrepreneurs it supports, and for local groups that support them, NC IDEA has developed a separate network of investors and veteran entrepreneurs that provide financial capital and entrepreneurial expertise.
Those partners understand the type of support entrepreneurs need based on the phase their organizations have reached in their “life cycle,” says Ruhe, who spent 20 years as an entrepreneur and another seven years at the Kauffman Foundation in Kansas City, including two years as vice president for entrepreneurship.
In addition to the challenges all entrepreneurs face, research shows that female entrepreneurs are significantly underrepresented in venture capital, and also that they face biases in private equity, says Ruhe, who joined NC IDEA two years ago.
So one of NC IDEA’s programs works to “help women overcome that bias, mainly through intensive mentoring by people who have been successful in private equity and who are aware of and vigilant of the pitfalls that women face,” he says.
Overall, NC IDEA recognizes that all entrepreneurs in the state face challenges that are greater “than we currently have the capacity to serve,” and so the Foundation is developing a 10-year plan to “help more people of greater need,” he says.
“There are a large group of significantly underserved individuals with high entrepreneurial potential, notably in our rural communities,” he says. “There are 80 rural counties in the state of North Carolina where there’s very little programming available” for entrepreneurs. “But great ideas are not geographically bound, or ethnically bound or gender-bound. They can come from anyone, anywhere.”
As a nonprofit, Ruhe says, NC IDEA is perfectly positioned to take the risks that are essential for entrepreneurs to succeed.
“Nonprofits should be risk-takers, but there are a far too many foundations that are comfortable and put money only into things that are very familiar, very predictable,” he says. “We have the luxury of taking chances and failing from time to time.”