Prior to submitting a funding application, carefully review the following FAQs.
InvestMS and Innovate Mississippi are related through the SSBCI program of the US Department of the Treasury. Mississippi will be provided $86M in federal funding, making InvestMS possible. It’s a $26M equity program administered by Innovate Mississippi.
We’re always on the lookout for new applications and we review them regularly. You can apply anytime without worrying about a fixed deadline.
We will evaluate applications against InvestMS guidelines set by Mississippi and US Treasury. In addition to evaluating the company’s viability, we assess its industry focus, proof points, team expertise, and go-to-market strategy.
If we find that your intake aligns with our program, we will reach out to you to schedule a call or meeting. On the other hand, if we determine that your intake is not a good fit for our program, we will send you an email to let you know and guide you to other resources.
The State Small Business Credit Initiative (SSBCI), which has been expanded and reauthorized through the American Rescue Plan Act, will be provided with $10 billion by the US Treasury. This fund will help small businesses to access the capital they need to invest in job-creating opportunities. The initiative will provide financial support to states, the District of Columbia, territories, and Tribal governments to promote American entrepreneurship, support small business ownership, and democratize access to capital across the country, including in underserved communities. For more information about the program, including detailed guidelines and requirements, please visit the SSBCI website.
All InvestMS portfolio companies and funds, which includes the portfolio company recipients of SSBCI capital from those funds, must participate in both quarterly and annual reporting requirements. Innovate Mississippi will collect this data and submit it to MDA, who will, in turn, submit the data to the U.S. Department of the Treasury by stated deadlines.
As a condition of receiving SSBCI funds, all investees must provide access to their books and records to the Treasury Inspector General and the Government Accountability Office. This includes detailed loan and investment records, subject to applicable privacy laws such as 12 U.S.C. § 3401 et seq.
Mississippi and all other participating states, received an initial SSBCI allocation from the US Treasury. We must meet programmatic requirements and invest a minimum of 66% in SEDI-owned businesses. More information on Socially and economically disadvantaged individuals (SEDI) can be found on the SSBCI website.
‘SEDI’ refers to Socially and Economically Disadvantaged Individuals. A portion of SSBCI capital will be invested into SEDI Owned and Controlled businesses meaning at least 51 percent of the business is owned and controlled by SEDI individuals meeting one or more definitions from the following criteria:
In order for a company to receive investment from InvestMS, the company must sign a certification verifying their compliance with the conflict of interest standards set forth in Section VIII.f of the SSBCI Capital Program Policy Guidelines (starting on page 31).
To briefly explain, these standards state that no SSBCI insider, or any family member or business partner of an SSBCI insider, can have a personal financial interest in the investee unless an exception specified in Section VIII.f of the SSBCI Capital Program Policy Guidelines applies. The terms “SSBCI insider,” “family member,” “business partner,” and “personal financial interest” are defined in Section VIII.f of the SSBCI Capital Program Policy Guidelines.
An SSBCI Insider may co-invest alongside SSBCI capital into new investments, provided that the Insider does not have a pre-existing financial interest in the company. However, SSBCI capital will not be available for follow-on investment consideration following this initial investment.
As part of the application process, InvestMS will request the company’s latest capitalization table to compare the list of all investors against the State of Mississippi’s list of SSBCI Insiders. If an SSBCI Insider is listed on the company’s cap table, the company will be ineligible for investment.
Please complete our Intake Form before applying for the InvestMS Fund or Seed Fund. Our investment team will be in touch to guide you through the process, which can take a few weeks to several months depending on various factors.
The InvestMS Investment Committee holds monthly meetings where startups present live pitches with an introduction from their lead investor. The committee votes on investment opportunities.
All approved investments must pass legal diligence, including certification for SSBCI program. Sample certifications are available for Use of Proceeds, Conflict of Interest, Sex Offender, and SEDI-Owned Businesses (as applicable).
At InvestMS, we have the right to decline any investment opportunity at any stage of our process. You will receive an email notification of our decision, along with any feedback that is immediately available. Due to the high number of applications we receive, we may not be able to provide personal feedback calls or meetings. However, if you are an eligible company or venture capital fund, you may have the option to reapply for funding at a later date. If your application is declined, you can still receive technical assistance through Innovate’s Development Team and Mississippi’s SBDC’s TA Assistance Program.
InvestMS does not lead investments. However, we collaborate with the company’s CEO and founders to help them understand the terms for the investment round. If the company has already set the terms for their investment round, InvestMS will evaluate these terms and consider them in the investment decision made by the Investment Committee. Our objective is to generate a return on InvestMS capital investment and to position the company for success in the future from an equity ownership perspective.
InvestMS cannot lead investments. However, it can match investments up to 1:1 from its $11M Direct Fund, which can make initial equity investments ranging from $50k to $1M into early-stage, pre-seed, and seed startups.
A 1:1 private capital match with InvestMS can be satisfied by angel investors or angel groups who provide investment capital on the same terms.
Proceeds will only be used for legitimate business purposes, and not for any prohibited activities such as repayment of outstanding taxes, repayment of taxes held in trust or escrow, or purchasing ownership interests of any owner. Additionally, the capital cannot be invested in companies engaged in speculative activities, generating over 50% of annual net revenue from lending activities, conducting pyramid sales, conducting activities prohibited by federal law (including those related to cannabis), and deriving over one-third of gross annual revenue from legal gambling activities.
InvestMS investment applications require matching private capital on at least a 1:1 basis. The minimum match requirement is not negotiable. Competitive applicants will have a committed lead investor, who will be expected to participate in certain portions of the application and evaluation process. If you currently lack matching private capital, our development team will help you assess your funding options under other non-SSBCI programs offered through Innovate Mississippi.
The 1:1 private capital match requirement is assessed on a per-transaction basis. Matching private investments cannot be made on more favorable terms than the terms of InvestMS’s investment. Debt and grant financing, Mississippi Seed Fund awards, and funding or personal capital provided by the founder(s), employees or family members among other ineligible investments and funding sources, do not qualify as private capital and cannot be used to meet the private match requirement. Private capital investments received within 90 days prior to the closing of InvestMS’s investment may, in some circumstances, be eligible to count toward the 1:1 private equity match when Treasury and state guidelines are met. Capital invested more than 90 days before the closing of InvestMS’s investment will not count toward the 1:1 private capital match under any circumstances.
InvestMS has specific SSBCI requirements for startups seeking a capital investment match. To be eligible, a startup must have at least one committed investor who has yet to close on their commitment with a minimum investment of $50,000. According to SSBCI compliance guidelines, InvestMS can match funds that are closed within a 90-day window. By “closed,” we mean the date on which the signed closing documents are exchanged with your investors, which starts the 90-day window, and then money is transferred after the signed documents.
InvestMS does not take a board seat, however, the InvestMS program takes an observation seat on the board of all portfolio company investments. This allows us to stay informed, provide guidance, and support the company’s growth, although we do not have voting rights.
A venture capital fund is a fund that meets the SEC’s definition of a venture capital fund, as shown here. Other types of funds will not be considered for investment at this time.
InvestMS is seeking to partner with early-stage venture capital funds that are aligned with our mission to expand access to capital for Mississippi-based startups.
We are targeting an InvestMS LP investment of $1M–$5M per fund, with a 1:1 private capital match required. At the time of application, we expect at least 50% of the matching capital to be secured, with a clear plan to complete the full match and close within 90 days. Applications with higher match readiness may be prioritized.
Funds must target investing 100% of InvestMS capital—and the corresponding match—into Mississippi-based companies that meet SSBCI eligibility requirements. We are open to participating as a minority LP in a larger fund; however, InvestMS capital may only be used for investments that fully comply with U.S. Treasury SSBCI guidelines, regardless of the fund’s broader strategy.
We prioritize funds that are based in Mississippi, have previously invested in the state, or show a strong commitment to contributing to founder development and ecosystem growth here. Sidecar fund structures may be considered if they meet Treasury guidelines.
If selected, funds will be required to comply with all SSBCI rules, including Treasury’s conflict-of-interest standards, reporting requirements, and other documentation.
To begin, submit a completed application through the InvestMS Funds Program portal. Applications are reviewed on a rolling, first-come, first-reviewed basis. The full process—from application to investment decision and legal review—typically takes several months. InvestMS is committed to a fair, transparent selection process and will meet with all potentially eligible fund managers to assess alignment with program goals.
Capital commitments require approval from InvestMS Investment Committee, which meets monthly.
Under SSBCI program guidelines, a standard management fee is not included in the InvestMS capital commitment. Instead, SSBCI allows for Service Fees, which may be used to support direct services provided to SSBCI-backed portfolio companies. See the FAQ below for details on how the 1.71% Service Fee allowance operates.
InvestMS capital does not cover the standard fund formation costs as per the guidelines of SSBCI program.
As permitted by U.S. Treasury, funds may request service fees on a quarterly basis, up to a cumulative cap of 17.1% over the life of the fund, based on their InvestMS capital commitment. These fees must support direct services to SSBCI-backed portfolio companies, be disclosed in fund agreements, reported to MDA, and certified by the companies receiving them.
The 1:1 private capital match must be met at the fund level, meaning each dollar of InvestMS SSBCI capital must be matched by an equal amount of private, non-public investment. At least 50% of the required match should be committed at the time of application, with a plan to secure the full match and close within 90 days.
Please note that according to the SSBCI program guidelines, businesses must be certified regarding their “Use of Proceeds” at the time of InvestMS’s investment. It is important to keep in mind that funds obtained from the State Small Business Credit Initiative (SSBCI) can only be used for specific business purposes. For additional details, please review the SSBCI sample certifications.
When investing SSBCI capital, InvestMS Fund recipients must follow all SSBCI program guidelines, complete required certifications, have a 1:1 private capital match, and collect demographic data. InvestMS will assist with contractual language to ensure programmatic requirements are met and enforced.
A sidecar fund may qualify for SSBCI-supported investment under the Capital Program Policy Guidelines as a main fund if it meets SSBCI program requirements.
InvestMS adheres to the SSBCI 2.0 program guidelines set by the U.S. Department of the Treasury, which do not allow the investment of SSBCI capital into portfolio companies where there is an existing financial interest. Therefore, the capital commitment made by InvestMS into newly formed funds can only be used to invest in new companies and not in any existing portfolio companies.
InvestMS has specific SSBCI requirements for startups seeking a capital investment match. To be eligible, a startup must have at least one committed investor who has yet to close on their commitment with a minimum investment of $50,000. According to SSBCI compliance guidelines, InvestMS can match funds that are closed within a 90-day window. By “closed,” we mean the date on which the signed closing documents are exchanged with your investors, which starts the 90-day window, and then money is transferred after the signed documents.
Stay updated on SSBCI by signing up here.
Are you a startup or VC fund in Mississippi? Let’s connect.
InvestMS reserves the right to amend or modify InvestMS’ SSBCI program or the information provided in this description at any time. Eligibility for the InvestMS SSBCI program is not a guarantee of funding. Any provision of funds under the InvestMS SSBCI program is contingent upon receipt of SSBCI funds by InvestMS and the availability of funds for investment. The InvestMS SSBCI program will conform with all applicable federal and state laws, regulations, and rules. Additional information about the SSBCI program can be found here.
Copyright © 2023 All rights reserved.
