[V]ermont Innovation Commons, a business accelerator project recently formed to invest in Vermont companies, has acquired Milk Money, an online equity crowdfunding portal created to help Vermonters invest their money in local startups.
The acquisition of Milk Money adds an investment channel to the Innovation Commons, whose funders plan to build a physical site where entrepreneurs can work with mentors and find several different possible investors, said Bob Zulkoski, a founder of the Vermont Works investment firm and of the Innovation Commons. The Commons, a registered B Corporation, acquired 100 percent of Milk Money on Oct. 9 in exchange for stock. Vermont Works was created to use investing for positive social impact.
The purchase gives the two-year-old Milk Money a new lease on life, said co-founder Louisa Schibli. Because the small company wasn’t able to charge fees for transactions the way Kickstarter is, it was hard for Milk Money to survive.
“Milk Money either needed to be housed with somebody else and/or change the business model, basically, so now we’ve done both,” Schibli said. Milk Money will be relaunched with adjustments in the next month or so she said. Schibli is now a partner in Vermont Works.
She added that the deal gives Milk Money physical office space for the first time.
Schibli said she and Milk Money co-founder Janice Shade were talking to businesses around the state.
“The Commons lines up with us on their mission to help entrepreneurs throughout the entire state,” Schibli said.
Shade left Milk Money this spring to help start an educational nonprofit for investors.
“It’s the classical entrepreneur study: We were underfunded as a startup, we got funding to prove our concept, and we needed additional capital to continue evolving and innovating and refining our model to get it toward profitability,” Shade said.
From the perspective of the Innovation Commons, the acquisition broadens the investor base and helps Vermont Works and the Commons with their goal of introducing more investors to Vermont businesses, Zulkoski said. Vermont Works is working to bring in investors from outside the state; Milk Money is focused on those within the state.
“It’s a dramatic difference in size and prospective impact,” Zulkoski said. “We are ultimately expecting to invest between $5 and $7 million in each one of our portfolio companies, where the typical size of a Milk Money raise would be in the form of a few hundred thousand dollars.”
That means Vermont Works can reach more early-stage businesses, said Mark Naud, executive director of the Vermont Innovation Commons.
“It broadens the spectrum and improves the business climate for entrepreneurs,” he said.
Corrections: A previous version of this story incorrectly referred to Milk Money co-founder Louisa Schibli as Lisa. Fellow co-founder Janice Shade left the organization this spring, not in October. Also, a previous version of this story incorrectly referred to Vermont Innovation Commons and Vermont Works as venture capital firms. They are a business accelerator project and investment firm, respectively. This version also clarifies that Milk Money is an online equity crowdfunding portal, not just an online crowdfunding portal.
