Thank You for Your Service - 4 Business Funding Programs for Veterans
There are more than 2.4 million businesses operated by veterans nationwide, according to the SBA 2012 Veterans Report. Despite this growing trend towards entrepreneurship, funding options that specifically benefit veterans are difficult to find. Here are four unique funding programs if you are a veteran starting or expanding your business.
1. Self-employment grants for service-disabled veterans. Service-disabled veterans can connect with a self-employment program offered through the Veterans Administration.
Participants are required to submit a feasible and complete business plan for any funding considerations. As part of the process, veterans are assigned to either Category I or Category II. Those categories determine the level of self-employment funding may be available.
Veterans designated Category I have the most serve service-connected disabilities and self-employment is considered a viable option. Category II is designated for veterans with serious employment challenges but not considered severe.
Depending on the category, veterans can obtain a grant to fund purchase of equipment, inventory, supplies, training, licensing fees and marketing. Veterans interested in the program can contact their local VA office where a counselor will help them qualify for the self-employment program. Funds allocated for start-up enterprises are grants that do not have to repaid.
2. Angel investment group supporting veterans. Hivers and Strivers is an angel investment group funding early-stage investments in start-up companies founded and run by graduates of the U.S. military academies. The company generally invests $250,000 to $1 million in a single round.
A company seeking larger rounds can actively look to other investor groups in the Hivers and Strivers network for additional funds. Their goal is to support veteran entrepreneurs through a successful exit with a return 10 times the initial investment. Veterans can learn more about Hivers and Strivers and complete an application available on the front page of the company website.
3. Venture capital fund serving veterans. The Veterans’ Opportunity Fund (VOF) is the first venture capital fund formed to invest in businesses that are started, owned and/or managed by veterans of the United States armed forces. The investments range up to $3 million.
The fund focuses on companies based on the East Coast. The industries of interest include technology, healthcare, business services,and specialty manufacturing. The stage of interest is at early revenue or after a product or service can be evaluated.
Veterans interested in pursuing an opportunity with VOF can submit a business plan directly through the company website.
4. Online lending platform for veterans. Street Shares is an online lending platform designed to connect investors and small business owners to support veterans starting or expanding their business. Veteran-owned businesses can apply online in about 10 minutes.
The online auction periods have ranged from five to 30 days. Business owners pitch directly to lenders for loans of $5,000 to $50,000 with one, three, of five-year terms. Accredited investors can fund any portion of up to 90 percent of the requested loan amount with bids as low as $25 per business. StreetShares takes the first 10 percent. Co-founder Mark Rockefeller describes the platform as "'Shark Tank' meets eBay."
While each of these programs follows standard due diligence in their funding, their social-driven goals include increasing the number of veteran-owned businesses nationwide.