News & Media

July 20 Learning Community Forum on Rural Engagement for Resilient Communities

On July 20 at noon ET, APLU’s Learning Community Forum on Rural Engagement for Resilient Communities is holding a discussion on new models for equity-based angel and venture capital to spur development in rural areas. Learn more below and register here.

Michael J. Gaffney, Washington State University Extension
Sheila Martin, APLU

Rural Venture Capital

Discussion Lead:
Matt McKenna, Georgetown University Rural Opportunity Initiative

Equity-based angel and venture capital (VC) is an important source of capital for businesses, especially start-up businesses and businesses in early or rapid growth stages that may have difficulty obtaining traditional debt capital. Most of this capital is typically concentrated in a handful of states, such as California, Massachusetts, and New York. Although recently that funding has started spreading to a larger number of non-coastal states, the percentage of venture capital that makes its way to rural companies is still very small—only about 1%. This lack of access to capital in rural communities–whose economies are sometimes very dependent on small businesses–can impede the growth of those important small businesses, stifling the growth of rural jobs and income.

There are some government resources to reduce the cost and increase the availability of capital for rural businesses, including SBA financing, export assistance, USDA Rural Development, and rural opportunity zones. But these programs sill leave a big gap, and private sector equity capital is key to filling that gap.

VC investors are usually driven by identifying investments that can provide the greatest return on investment at the lowest cost. This sometimes translates into larger or later-stage investments rather than the smaller scale of investment that may be needed by a rural business. Nevertheless, investments in small businesses rural communities can pay off for investors. A 2009 analysis of venture investments in rural communities found that these investments showed the same level of performance as their rural counterparts, and that equity-backed companies in rural communities are significant job creators and appear to create jobs with the same efficiency as other economic development tools. But investors are often unaware of these opportunities for investments that provide sufficient private returns while generating additional benefits for rural communities.

What new models might bring a greater level of venture investment in rural communities? Community development venture capital is one new model for addressing the patient capital needs of underserved geographies. How might universities take advantage of these and similar tools to bring a greater level of venture capital investment to rural communities? Tune in to our learning community to discuss strategies and resources with your rural economic and community development colleagues.


  • McKenna, Matt. 2018. “Access to Capital is Critical to Ensuring Success of Rural Entrepreneurs.” VC-list, June 6. https://vc-list.com/startup-capital-rural-entrepreneurs/.
  • Scruggs, Patricia., Embree, Wayne, and Wiltbank, Rob. 2009. The Role of Equity Capital in Rural Communities. Report supported by the Ford Foundation. https://community-wealth.org/content/role-equity-capital-rural-communities.
  • Sass Rubin, Julia. 2008. Community Development Venture Capital in Rural Communities. U.S. Department of the Treasury, CDFI Fund-Research Initiative. https://www.cdfifund.gov/sites/cdfi/files/documents/community-development-venture-capital-in-rural-communities.pdf
  • Economic Development & Community Engagement

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