Community College Seeks Treasury's Help in Replicating Its Model for Entrepreneurial Growth

Thank you for hosting the Access to Capital Roundtable as part of President Obama's "Winning the Future Forum on Small Business" held today in Cleveland. It was a pleasure meeting you and a privilege to share with you the success of the Innovation Fund created by Lorain County Community College. I am confident we can discover meaningful opportunities for this model to directly advance the goals of the President's Startup America Initiative. In fact, as part of the President's visit to Cleveland, the White House announced the launch of Innovation Fund America, modeled after Lorain County Community College's program.

As you will recall from our conversation, the Innovation Fund provides modest ($25,000 to $100,000) but crucial funding for early-stage entrepreneurs -- the point in their development when they've exhausted their personal resources, but before an investor will take the financial risk. To date, the Innovation Fund has awarded $4.3 million to 60 high-growth companies in northeast Ohio, which have created over 100 new jobs and attracted more than $41 million in follow-on investments.

The IRS played a critical role in the development of the Innovation Fund. In 2006, the Lorain County Community College Foundation received an exclusive and landmark private letter ruling authorizing contributions for the Innovation Fund tax deductible. I've enclosed the ruling for your reference. The IRS considered the Innovation Fund charitable because recipients are required to create a student internship in entrepreneurship as a condition of their award. To date, more than 130 students have walked shoulder-to-shoulder with entrepreneurs to understand what it means and what it takes to start a business because of this program. This pay it forward concept not only helps entrepreneurs receive access to critical funding and talent, but inspires students to become the next generation of innovators.

The launch of Innovation Fund America will be Lorain County Community College's role in the recently announced American Association of Community College's Virtual Incubator Network, funded by the Charles Stewart Mott Foundation. The objective is to replicate LCCC's Innovation Fund throughout other community colleges across the country, providing the tools and support necessary to stimulate entrepreneurship in their own communities.

In doing so, we will certainly require assistance from the U.S. Treasury Department to expand our existing private letter ruling to include other geographic locations beyond northeast Ohio, but still employing the same principles, concept and system contained within Lorain County Community College's existing ruling. I've enclosed materials for your review and hope you can help connect us with the appropriate leadership on your team who can help us with this process.

Furthermore, I welcome the opportunity to enlist the capacity of Lorain County Community College's Innovation Fund and other business incubating and commercialization strengths, such as LCCC's SMART Center for Microsystems Commercialization, in support of the President's call to action through the Startup America Initiative. Please consider this an open invitation to visit Lorain County Community College.