The team behind a new Baltimore-based investment firm has raised $17 million, and are looking for "tenacious" tech entrepreneurs to fund.
A group of tech founders and operators-turned-funders began quietly raising for a new venture capital fund, called Early Light Ventures, last year. Although the team had only intended to raise between $2 million and $3 million to kick off their investment efforts, they ended up with a $17 million inaugural fund, the vast majority of which was raised from local backers, said Sam Diener, a managing partner at Early Light.
Diener is leading the fund alongside Scott Garber, also a managing partner, and Mike Leffer, principal. Between them, the three have accumulated backgrounds and experience standing up a handful of tech startups, and investing in such startups through organizations like the Baltimore Angels. Diener explained that while angel groups are a great way for wealthy individuals to come together and make investments from time to time, the fact that these groups do not work with pools of existing, committed capital can make the investment process more complicated, and can cause founders to wait weeks for word on whether they'll be getting funding and how much money will be coming in.
"As a full time fund, we are able to be more engaged in the ecosystem and act much faster," he said.
Early Light aims to write checks of between $500,000 and $750,000, said Leffer, largely to seed-stage, business-to-business software companies. It has made about 13 investments to date, including three in Baltimore tech companies. The one local firm the partners were willing to name is advertising technology firm Konduit, which recently raised less than $1 million from New York's RiverPark Ventures in addition to Early Light and other undisclosed investors, according to PitchBook.
Leffer explained that Early Light seeks to support "tenacious" and "underdog" entrepreneurs who are standing up tech companies across the country. Ideal candidates may be young or first-time founders, without the clout or connections that come with spinning out of institutions such as Harvard University or Johns Hopkins, he said, but who have the "hustle and drive" to succeed.
Early Light aims to make investments in a "low mandate" way, Leffer said, meaning the partners are not looking to lead companies' funding rounds or take board seats as part of their deals.
"We are happy to work alongside other investors that are more qualified to take the lead," Leffer said. "We can actually move really quickly, and get an investment wired in just three or four days, especially if there is already a lead investor in place."
Diener said Early Light will make investments through the inaugural fund for four years.
Leffer and Diener noted they were especially proud of how the Baltimore investment community came together to support their new fund. Up to 70% of the money for Early Light's first fund came from local investors, Diener noted, and many of the backers have stepped up to support and work with Early Light's portfolio firms beyond just contributing money.
"So many people in Baltimore were willing to take a chance on this group of early-stage fund managers without ever really meeting us," Dieer said. "I think it really speaks to the strength and supportiveness of the community here."
Early Light is among several new funders to make their debut in the local VC space within the last year. Others include RareBreed Ventures, a $10 million pre-seed fund launched by McKeever "Mac" Conwell, and Catalio Capital Management, a biotech-focused VC which spun out of Camden Partners last summer and recently raised a new $100 million fund.
