Badger Fund of Funds’ remaining Milwaukee-centric venture fund, Forward Capital, was restructured into a new venture fund that will invest in pre-revenue startups.
Forward Capital had been focused on investing in spinouts from area manufacturing companies. The Gateway Capital Fund will still be geographically focused on Milwaukee County. Dana Guthrie, founder of Milwaukee-based angel network Alchemy Angel Investors, has been selected to manage the fund.
“Dana has the credentials, drive and experience in the Milwaukee financial ecosystem to make a difference in the region’s economy,” Ken Johnson, Badger Fund of Funds partner Ken Johnson said in a statement. “She emerged from a very strong field of applicants to be the clear choice to serve as managing partner. She is well positioned to tap the great potential in our state’s largest metro area by surfacing high-potential entrepreneurs and partnering with them venture dollars to grow successful companies.”
Gateway Capital Fund will raise at minimum $5 million and a maximum of $12 million before it invests in startups. BFOF will invest as much as $5 million into the Gateway Capital Fund, according to a press release.
“I’m excited to bring the Gateway Fund’s focus on being the first venture capital fund investor into startups to Milwaukee’s entrepreneurial community,” Guthrie said in a statement. “The Badger Fund commitment to the Gateway Fund shows their support of this investment focus.”
Gateway Capital Fund will follow a similar investment strategy as two other BFOF – the Winnebago fund in Neenah and the Idea Fund in La Crosse, Johnson said. Collectively, the two funds have made more than 15 investments in Wisconsin pre-revenue startups since 2017 with nine of those startups receiving a second or follow on investments.
Generation Growth Capital, Inc.founder and managing director Cory Nettles says the new fund will spur growth and much needed addition to the local and regional venture capital ecosystem.
“Currently there are no active investment funds focused on pre-revenue startup companies within Milwaukee, even though it is these small companies that serve as the engine and lifeblood of any economy,” Nettles said.
Before Gateway Capital, the BFOF operated two Milwaukee-based funds including Forward Capital and Bold Coast Capital.
Forward Capital, managed by Dan Voell, focused on spinouts from manufacturing companies in Milwaukee County. However, since the fund was launched in 2019, Voell had not attracted any investments, Johnson said.
Although Forward Capital has been restructured, Voell will continue working with BFOF as a member of Gateway Capital’s investment committee, Johnson said.
In late April, BFOF’s other Milwaukee-based fund Bold Coast Capital shut down after fund manager Ross Leinweber notified the fund’s 15 independent investors that he would no longer be raising the early-stage venture fund.
Leinweber attributed a lack of local investors as the primary reason for the failure of the fund, adding that COVID-19 was a contributing factor, setting back fundraising efforts by 12 to 18 months.