Founded in 1987, Ames Seed Capital is an equity based investment fund operated by the Ames Regional Economic Alliance. We provide equity-based funding for central Iowa startups at seed and early growth stages. The capital we invest is provided by individuals and businesses primarily located in central Iowa.
Purpose: Ames Seed Capital (ASC) makes investments in exchange for equity (ownership). Our goal is to assist businesses achieve growth, leading to an “exit” which creates a commensurate rate of return for Ames Seed Capital investors.
Fund: ASC is a fund with a decision-making board of directors which provides the advantage of not having to pursue investors individually.
Prospective businesses should be able to demonstrate a credible plan and a reasonable degree of traction with prospective partners or customers.
Seed stage businesses are often pre-revenue but have compelling progress in validation of products and markets.
Growth stage businesses are sometimes cash-flow negative but have achieved relationships with key partners and have paying customers
Our investments range from $50,000 to $400,000. Investments at the larger end of the range are often achieved in multiple investment tranches.
Investments must be structured to result in preferred stock; however, the initial investment may be in the form of a convertible loan or SAFE (Simple Agreement for Future Equity).
Investments are limited to businesses in Central Iowa, which does not necessarily require a global or U.S.A headquarters in Central Iowa, but at minimum a significant operation, such as an R&D laboratory or manufacturing facility.
Investments are not focused on a specific industry. The common factors are cutting-edge products, large market opportunities and high growth potential.
ASC can operate as a lead investor; however, investments are often made in partnership with other funds and investors.
Our process is flexible but generally consists of the following steps:
Introduction: The first meeting is often a phone call, Zoom or a personal meeting with ASC Director Mike Upah, or with an ASC board member. Please email a request to meet to Mike Upah (Mike@AmesAlliance.com) and include a business summary.
Small Group: A typical second step is a small group meeting with three to five managers. The result can be an invitation to pitch the full ASC board; a pause for ASC to gather information and determine the next step; or the setting of a milestone which, when achieved, will be an opportunity for reconnection.
Full ASC Board: A pitch to the full ASC board can range from an opportunity to create familiarity and feedback, to a vote on investment.
While there are many formats for a fundraising pitch, those that are well done strike a balance between being concise, focused and informational. Presentations are not required to be in any specific format, but a guide to making a presentation is available.
Meetings typically occur at the Ames Regional Economic Alliance Building at 304 Main Street in Ames, but can be offsite if that is useful for demonstration.
Ames Seed Capital began operations in 1986 and is currently investing from Fund VII, which is composed of 101 investors with a collective $4.235M investment commitment. Each fund is composed as a cohort of investors.
The Fund, which is a for-profit entity, was formed as part of an economic development portfolio of tools and is overseen by the Ames Regional Economic Alliance (AREA).
Questions about how to become an Ames Seed Capital investor should be sent to ASC Director Mike Upah (Mike@ameslliance.com).
ASC’s goal is to assist businesses achieve growth through equity investments, leading to an exit event which creates a commensurate rate of return for Ames Seed Capital investors. Secondarily, ASC seeks economic growth in Central Iowa through technology business development.
ASC is an equity investment fund, rather than an investment forum. As a fund, members make an investment commitment (minimum of $25,000), which will be invested in multiple businesses (typically 10 to 20). A board of managers that is elected by the full body of members makes investment decisions. Members of the Fund can be individuals or entities.
High quality investment opportunities at the startup and growth stages often have minimum investment requirements of $25,000 to $100,000. Ames Seed allows investors to participate in such opportunities, but at a fractional amount typically ranging from $1,000 to $3,000 per investment. As a result, a $25,000 commitment will be invested in a portfolio of businesses. In addition, Ames Seed has an experienced board making investment decisions.
Also, because there isn’t a general partner in the fund, it means that the vast majority of income is returned to Members.
Each fund is composed of a cohort of investors who all share in each investment at their pro-rata level of commitment to the fund, up to their total commitment level. ASC began operations is currently investing from Fund VII.
Early-stage investments in businesses with high growth potential and realistic exit opportunity via acquisition or public offering.
Business Stage: seed or growth stage, meaning business are often pre-revenue but have compelling progress in validation of products and markets, or are growing revenue but typically still cash-flow negative.
Business Domain: Investments are not focused on a specific industry. The common factors are cutting-edge products, large market opportunities and high growth potential. Roughly 50% of the Fund’s investments are in businesses related to Iowa State University.
Business Location: investments are limited to businesses in Central Iowa, which does not necessarily require a headquarters in Central Iowa, but at minimum a significant operation, such as an R&D laboratory or manufacturing facility.
Range: Investments typically range from $50,000 to $400,000, and at the larger end of the range, investments are typically made as a series of investments.
ASC Members make investment payments to ASC only when investment decisions have been made. Investors should be prepared to make two to four investments annually.
Ames Seed has made investments in numerous successful companies, three of which have been able to execute initial public offerings (IPOs), including Engineering Animation, NewLinkGenetics, and Workiva. Numerous others have exited through significant acquisition such as RocketChips being acquired by Xylinx, Harrisvaccines being acquired Merck Animal Health and Advanced Analytics Technologies being acquired by Sigma Aldrich.
The Ames Regional Economic Alliance (AREA) is the parent organization of Ames Seed Capital and provides significant support and resources for operating the fund.
Contact Mike Upah
Director, Ames Seed Capital
mike@amesalliance.com
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