The Wellmark Community Ventures Fund began as a $5 million fund for investment in Iowa businesses over five years. The fund still continues and is sponsored by Wellmark Blue Cross Blue Shield of Iowa and Equity Dynamics. Applicants to the fund can apply through any Pappajohn Center in Iowa. Typical funding is $10,000 to $100,000 in convertible debt financing. Applicant companies must be an Iowa-based, for-profit corporation. Ventures supported by the fund include technology, bio-technology, educational technology, advanced manufacturing, medical, and cutting-edge computer-related products or software.
How to Apply
History Of The Wellmark Fund
John Pappajohn, founder of the Pappajohn Entrepreneurial Centers and president and founder of Equity Dynamics Inc., announced at a news conference in Ames on September 9, 2002, that Wellmark Blue Cross and Blue Shield has committed up to $5 million of its projected insurance premium tax reduction to the centers to fund the startup of Iowa businesses.
The $5 million is part of $25 million Wellmark pledged earlier this year to designate for Iowa-based economic development opportunities. This year, in order to improve the ability of Iowa-based insurance companies to compete nationally, the Iowa Legislature passed and Governor Tom Vilsack signed into law Senate File 2318; the bill reduced the state’s insurance premium tax from 2 percent to 1 percent phased over a four-year period through 2007.
The legislation was viewed as crucial to maintain Iowa’s prominence as a major center for insurance and financial services companies and to enable the future growth of this industry by attracting new companies to Iowa and retaining existing businesses. As part of this change in law, Wellmark, along with several other insurance companies, voluntarily agreed to support a plan to commit $60 million of the projected insurance premium tax reduction for economic development in Iowa.
Wellmark’s commitment of up to $5 million to the Pappajohn Entrepreneurial Centers will be structured as follows: $1.5 million prior to December 31, 2003; $1 million in 2004, 2005, and 2006; with up to $500,000 in 2007. Wellmark also will devote the next two to three years to researching in-state economic development opportunities for the remaining $20 million.
The Pappajohn Entrepreneurial Centers provide a range of innovative education, programs and support services designed for entrepreneurs and existing business owners. The centers provide expertise in all stages of business planning and development, and serve as vehicles to bring new products and technologies to market. The centers collaborate with other organizations as necessary to stimulate Iowa’s entrepreneurial environment. The investment and support of these centers have led to hundreds of new businesses and improved operations for small-business owners across the state.
Venture projects will be identified, investigated and recommended by Pappajohn Centers in four locations at the University of Iowa, University of Northern Iowa, Iowa State University and North Iowa Area Community College (NIACC) to Equity Dynamics. Equity Dynamics, at no cost to Wellmark, will further review the recommended projects, perform the necessary financial due diligence and, if appropriate, approve funding.
Wellmark, Inc., does business as Wellmark Blue Cross and Blue Shield of Iowa. Wellmark and its subsidiaries and affiliated companies, insure or pay health benefit claims for approximately 1.7 million persons. Wellmark Blue Cross and Blue Shield is an independent licensee of the Blue Cross and Blue Shield Association.