Capital Midwest Fund, a Wauwatosa-based venture capital firm, has raised a new $25 million fund that it plans to invest in Wisconsin and Midwest companies.
“We’re looking for companies that use technology to solve problems, that organize, optimize, or accelerate business or help save lives,” said Teresa Esser, one of the principals in the firm. “Our goal is to invest in areas where our region has the greatest strengths. We love information technology. And we’re inspired by the strength in data centers. And we’re also looking at life sciences – that’s my focus.”
About half of the new fund, named Capital Midwest Fund II, will be invested in Wisconsin-based companies, Esser said. The rest will be spent in the Midwest and Great Lakes regions.
The Wisconsin Energies Foundation is the lead institutional investor in the new fund, Esser said. The rest of its investors are high net worth individuals from Wisconsin and the East Coast.
“A lot of them are prominent business executives who understand the opportunity here,” she said.
The other principals in Capital Midwest Fund are Stephen and Daniel Einhorn and Alvin Vitangcol. Stephen and Daniel Einhorn work together at Einhorn Associates Inc., a Wauwatosa-based firm that provides mergers and acquisition services to the pharmaceutical industry and financial services to the life sciences industry.
Esser is managing director with Silicon Pastures, a Milwaukee-area angel investing network. She is now busy connecting with other angel networks throughout the state and Midwest to find new investment opportunities for Capital Midwest Fund.
“My mission now is to call the leaders of the angel investment networks and ask them which companies (in their networks) could use an infusion of venture capital dollars,” she said. “Sometimes one introduction can make a world of difference for a young company and can help push them over the top.”
All of Capital Midwest Fund’s investments will be made with a five year investment horizon, Esser said. The Einhorns’ experience in mergers and acquisitions and investment banking will play a large role when the fund is structuring its investment agreements, she said.
“They (Stephen and Daniel Einhorn) know how to create liquidity for investors,” Esser said. “We’re starting with that end in mind. When we look at a company we ask, ‘What acquirer will ultimately buy this?’ That’s something we think about from day one.”