Madison-based NVNG Investment Advisors has made its first two investments after closing on its initial $40 million fund raise in October.
The firm raised the money from corporate and institutional investors, primarily in Wisconsin, and is planning to invest with venture capital firms willing to look at Wisconsin startups for potential investments.
While there is no guarantee the venture funds NVNG invests with will invest in Wisconsin companies, the idea is to bring eyes to Wisconsin startups while also giving Wisconsin corporations a better connection to the innovative companies already in the portfolios of the firms NVNG invests in.
Grady Buchanan, managing director of NVNG, said the first two firms NVNG has invested with are Matchstick Ventures and Social Impact Capital. He did not disclose the size of the investments.
Matchstick is a Colorado-based firm that invests $500,000 to $1.5 million in pre-seed and seed-stage startups across the Rockies and the northern portion of the country. Its previous investments include Milwaukee-based Fiveable.
New York-based Social Impact Capital seeks to combine top returns with positive social impact and focuses on areas like energy, water, food, health, environment, education, housing, access to capital and social justice.
“They’re really heavily focused on … how do we get our portfolio companies that are applicable to Midwest industry into the hands of your investors on the corporate side here in Wisconsin,” Buchanan said. “Bridging that gap, that’s what we look for in our funds quite a bit.”
NVNG is still targeting $100 million in total funds, but Buchanan said closing on the first $40 million allowed the firm to begin putting the money to work on behalf of investors. The firm’s SEC documents indicate there are 26 total investors contributing to the fund.
Earlier this year, NVNG officials said they were planning to close on $40 million to $50 million in June. Buchanan said the challenge of ironing out legal details and terms pushed the timeline back.
“Really it’s legal conversations that ended up taking months,” Buchanan said, adding that working in the virtual environment because of the pandemic has added to the challenge in an industry that thrives on building relationships.
Still, NVNG hasn’t struggled to find funds to potentially invest with and interest has been high from funds the firm targets.
“Think about it from a VC perspective. Wisconsin to them looks like a completely untapped market in a very positive way,” Buchanan said. “They know things are happening here, they don’t know what the ecosystems look like here.”
“The fund pipeline is growing, almost every day, which has been interesting, not because we call funds every day, but because they’re interested in what’s happening in the Midwest,” Buchanan added.
Ultimately, NVNG plans to invest with 20 to 30 funds.
The firm’s vision also includes establishing a platform for its investors, venture capital funds and Wisconsin startups.
The idea is that corporate investors in NVNG would share what areas they are interested in, what problems they’re facing and what things they need. They would then also have a way to connect with the portfolio companies of the VC firms NVNG invests with. The VC firms also get access to corporations that could acquire or become customers of their portfolio companies.
A third piece of the platform would be profiles for any startup in Wisconsin, giving VC firms and corporations better and quicker visibility of the state’s startup ecosystems.
“Wisconsin, we have a lot going on, let’s just pull it all together and figure out a way to get venture eyes on it,” Buchanan said.