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Flatiron Launches Venture Philanthropy Funds By atnewyork Staff April 3, 2000 Despite the massive technology stock sell of the past few weeks, Silicon Alley remains one of the great wealth creators in recent memory in New York. However, little of the money created by the great New York Internet boom of the late 1990s has been channeled back into social or philanthropic causes up to now. Today, Silicon Alley venture capital firm Flatiron Partners announced a pair of initiatives that could help change that. Flatiron has formed two new funding vehicles, the Flatiron Future Fund and the Flatiron Foundation to fund what Flatiron partners call "social entrepreneurship in the new economy." The Flatiron Future Fund will be a traditional venture capital fund but will focus on investing in for-profit ventures that have a social mission such as helping children become prepared for life in a digital society; educating and encouraging entrepreneurship among minorities, women, and others with less traditional access to capital; and finding ways to encourage new and experienced entrepreneurs to turn their attention to social problems. The Flatiron Foundation is a public charity initially funded by Flatiron Partners Jerry Colonna, Fred Wilson, and Bob Greene, although the partners have been pitching the idea, apparently with some success, to Internet entrepreneurs who are also expected to donate. The Foundation will make grants to non-profit groups whose mission falls within the Foundation's targets. Cathy Clark, formerly a vice president at the Markle Foundation, has joined Flatiron as managing partner running the new entities. For Clark, the new ventures are a dream come true not only because they create a structure for allowing new money to flow into worthy causes but because the structure is designed to leverage the intellectual capital locked up in not-for-profits while bringing a new kind of efficiency to the way not-for-profits raise money. Today when a not-for-profit group wants funding for a project it draws up a budget and cobbles together funding from a variety of sources in a piecemeal fashion. Clark would like to see the new Flatiron groups help fund and operate companies and projects that can become increasingly more self-sustaining. She'd like to place venture capitalists and entrepreneurs on boards of not-for-profits where there expertise can be useful. And she's like the Flatiron groups to be able to syndicate funding for not-for-profits, making the whole procedure more effective. In fact, Clark is even interested in helping existing entrepreneurs start their own foundations. On the for-profit side, Flatiron is looking to fund companies that don't necessarily have the potential for giant exists in the short term but which help with some social aim. Clark uses the example of a Web education company doing school curricula online or companies that help women and minority entrepreneurs start companies. The Flatiron Partners - Jerry Colonna, Fred Wilson, and Bob Greene - will provide initial capital for both, and several prominent Internet entrepreneurs have committed to investing in and advising the funds. "The new economy has brought tremendous opportunity to profit from entrepreneurship," said Colonna, Managing Partner. "And we want to harness this new economy to give back."