Milwaukee-based early-stage venture capital fund Bold Coast Capital is no longer raising funds due to the economic impact of COVID-19 and a lack of local support, according to a Bold Coast Capital newsletter.
In January, Bold Coast Capital held its first close, securing more than $6 million from 12 investors. The fund had an initial total offering amount of $15 million, according to a filing with the Securities and Exchange Commission.
On March 23, Bold Coast Capital founder and fund manager Ross Leinweber notified his 15 independent investors of the fund’s closure and released them of their financial commitment.
“Given the state of fundraising conditions, the enormous uncertainty being introduced by COVID-19, and the fact that I had an opportunity to release their commitments at an optimal point to pursue other investment opportunities, the decision was clear and aligned,” Leinweber said in the newsletter.
Although Bold Coast continued to garner interest from investors through February, by mid-March, that interest had faded due to the impact of the pandemic, Leinweber said.
“Given my experience with investing throughout periods of volatility and world events, I knew the prospects for me reaching the finish line of $10 million had deteriorated substantially and that the timeframe to raise the remaining dollars would be extended significantly and would be uncertain,” Leinweber said.
The community’s lack of support for the fund also played a role in Leinweber's decision to end Bold Coast. Approximately 35% of the money Leinweber raised was from out-of-state investors while local academic institutions, corporate entities or “old money” Milwaukee investors or family offices provided no funds, he said.
“The failure of the Milwaukee investor base to financially back my efforts speaks to the systemic challenges the city faces in building a stronger entrepreneurial community that can compete in 2020,” Leinweber said.
In 2013, the state of Wisconsin provided $25 million to establish the Badger Fund of Funds, which raised an additional $5 million from the private sector and agreed to create six to eight venture capital firms in Wisconsin. The program is run by Santa Fe, New Mexico-based Sun Mountain Capital, which specializes in regional investment programs, and Kegonsa Capital Partners in Madison.
Bold Coast Capital was the fourth Badger Fund of Funds to be created in Wisconsin. The fund managers selected so far have formed the Idea Fund of La Crosse, Winnebago Seed Fund LP in Neenah, Rock River Capital Partners Fund I in Madison, the Winnow Fund in Madison and Milwaukee-based Forward Capital Fund.
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