The Greater Milwaukee Foundation announced it is investing $1 million in Gateway Capital, a venture capital fund focused on supporting pre-revenue startups in Milwaukee County.
GMF said its investment is expected to support between 10 and 12 startups.
The fund, which is part of the Badger Fund of Funds and is managed by general partner Dana Guthrie, said in October it is seeking to raise at least $5 million before it begins investing. BFOF said at that time it will invest as much as $5 million into the fund.
Gateway Capital will use the foundation’s investment as a “money for minnows” strategy, which focuses on making smaller investments across many startups and technologies, according to GMF.
GMF noted that the county has traditionally lacked early-stage venture capital investment, with analyses showing Black and Latinx founders have received just 2% of all venture capital in the U.S. over the past five years.
“Milwaukee has missed out on far too many opportunities to invest in entrepreneurship, particularly in Black- and Brown-owned businesses,” said Ellen Gilligan, president and chief executive officer of GMF. “On top of that, there are very few fund managers of color in the venture capital space overall. It's clear that this is a system in need of remaking, and the foundation can play a role in reversing these patterns in Milwaukee. We look forward to the positive impact Dana and the Gateway Capital Fund will have in our community.”
Gateway Capital is a restructured iteration of its predecessor fund, Forward Capital, which invested in spinouts from area manufacturing companies.
GMF also announced Friday that it has invested $10 million with Royal Capital Group to support the acquisition and redevelopment of the former Gimbels and Schuster’s department store building at 2153 N. Dr. Martin Luther King Jr. Drive in Milwaukee’s Halyard Park neighborhood, which is being converted into the future home of GMF and the Medical College of Wisconsin’s ThriveOn Collaboration. Royal Capital Group announced the acquisition of the 455,000-square-foot buildingearlier this week.
The investment gives the foundation an ownership stake in the building, which will also house its future headquarters, the Medical College of Wisconsin’s community engagement programs and first floor amenities for the community.
“This $10 million brick-and-mortar investment speaks to the depth of the foundation’s commitment to the people of Halyard Park, Harambee and Brewers Hill, as we support access to opportunity and racial equity throughout Milwaukee,” said Ken Robertson, executive vice president, chief operating officer and chief financial officer for the foundation. “When we announced the foundation’s new strategic vision earlier this month, we emphasized the need to approach community solutions differently, and our place-based investment in this transformational project shows we are serious about change.”
Construction is scheduled to begin in February 2021 with completion slated for spring 2022.
With both investments, GMF said its on pace to exceed its pledge to commit $30 million over five years to impact investing in the community.