Venture Philanthropy Meets Venture Capital: Codefi Launches New Co-Investment Funds

Pioneering Hybrid Model Blends Seed Funding and Venture Philanthropy to Catalyze Startup Growth in Smaller Metropolitan Areas and Rural Communities Across Southern Missouri

[Springfield, MO]: Codefi, a leading venture and tech-based development organization, today launched a groundbreaking regional venture investment solution – Innovate SOMO Funds. Innovate SOMO Funds represent a first-of-its-kind regional approach combining a non-profit fund funded by charitable contributions and a for-profit fund backed by limited partners, co-investing to make equity and revenue-based investments in startups across southern Missouri.

Innovate SOMO Funds are the latest in a series of developments led by Codefi and efactory at Missouri State University, co-creators in the Southern Missouri Innovation Network (Innovate SOMO), a regional collaborative working to unlock the full potential of entrepreneurship and innovation to transform entire communities in the
southernmost 47 counties in Missouri.

This pioneering co-investment model empowers the funds to maximize impact in the earliest, riskiest stages where startup funding is most scarce, especially in areas where traditional investment models often fall short. By concentrating on startups within southern Missouri, Innovate SOMO Funds will support innovation in a range of
locally important industry sectors including information technology, tech manufacturing, financial services, healthcare, and agriculture, and drive economic growth, and job creation where it’s needed most.

"Tech ecosystems beyond the major financial centers are often starved for the type of early-stage, risk-tolerant capital and comprehensive support required to translate great ideas into sustainable, job-creating enterprises," said Dr. James Stapleton, Codefi’s President and CEO. "These funds are specifically designed to catalyze opportunity
in these overlooked geographies, where there is tremendous philanthropy and interest in economic diversity and growth”.

Key facts about the Innovate SOMO Funds:
• Total fund size: $2 million, from combined nonprofit and for-profit funds
• Geographic focus: 47 southernmost counties served by the Southern Missouri Innovation Network
• Investment focus areas: High-growth potential software focused or enhanced solutions in most industries
• Target investment stages: Pre-seed and seed
• Co-investment model: Equity and revenue-based investments from nonprofit and for-profit funds
• Limited partner investors: Leading foundations, family offices, institutional, and accredited investors

Innovate SOMO Funds anticipates most investments will range from $50,000 - $200,000 and will include other strategic co-investors. The goal is for the initial vintage of the Funds to be deployed in two to three years.

Before beginning any formalized or public fundraising, the funds have received $700,000 in commitments of investments and support from local partners. Initial investment is led by the Hatch Foundation, located in Springfield, Missouri and an anonymous donor from Cape Girardeau, Missouri.

"Our Foundation is pleased to invest in supporting the next generation of entrepreneurs and the companies they
inspire, that will create more high-quality occupations for the people living in our communities," said Erin Danastasio, Executive Director of the Hatch Foundation. “We also think it's important this is a broad regional effort, and invite others across southern Missouri to join us in supporting it”.

The Innovate SOMO Funds have also received support from leading financial service organizations in the region. The Bank of Missouri, founded in Perryville, Missouri with branches serving communities across southern Missouri, has committed $100,000 to help offset administrative and management costs of the funds for the first
two years.

"The Bank has been a long-time supporter of Codefi, so we know first hand the economic impact their programs and services generate in the communities we serve, said Adrian Breen, Executive Chairman / CEO / President, The Bank of Missouri. “We invite other financial institutions to join us in supporting these efforts to create more economic prosperity in our region”.

Upon the creation of Innovate SOMO Funds, Accelerate SGF, Inc., a subsidiary of Springfield Innovation, Inc., transferred ownership of previous investments made by its accelerator program, which was delivered by efactory. The accelerator program made $30,000 equity investments to help support 21 startup companies. These investments and remaining cash in the last fund were donated to Codefi’s new non-profit fund.

"We’re really excited to be working with Codefi and the other partners to launch Innovate SOMO Funds, to expand upon the work we began nearly 10 years ago," said Allen Kunkel, Associate Vice President for Economic Development at Missouri State University. "We appreciate the support of the donors who allowed us to launch our
accelerator program, the region's first program of its type, and those investors supporting the new funds." Innovate SOMO Funds, working hand-in-hand with Codefi and efactory, creates an ecosystem that not only provides crucial seed capital but also the critical coaching and resources necessary to effectively launch and fuel the growth of promising startups. In August 2023, the organizations announced the launch of a comprehensive pipeline of programs that increase the capacity for attracting and supporting a larger number of tech-based startup concepts, founders, and companies from idea to growth. The cohesive system of programs and services has never been offered to entrepreneurs and innovators in the region.

For more information…
About Codefi:
Codefi is a nationally recognized venture and talent development non-profit organization that deploys an integrated systems of programs, services, and capital that accelerates the creation and attraction of
software-focused companies, develops startup founders, and educates and trains tech talent that expands the tech economy and creates high-quality occupations that improves the quality of lives and communities. On the heels of its collaboration with the efactory at Missouri State University and the creation of the Southern Missouri Innovation Network, Codefi announced its expansion to Springfield last year, including the relocation of its co-founder and President/CEO, Dr. Stapleton.