A new fund is launching in the Midwest to invest in early stage startups across the region. And it's led by a group of experienced founders who are committed to reinvesting in their startup communities.
The Midwest Fund is the latest geographic-specific VC group from The Fund, a New York-based venture firm that's previously launched funds in Los Angeles, Colorado, London and Australia. Leading the Midwest Fund are five founders based in four Midwest markets: Jennifer Fried, founder of Chicago-based ExplORer Surgical; Lynsie Campbell, founder of Pittsburgh-based ShowClix; Chris Bergman, founder of Cincinnati-based Gylee Games; Tapan “Tops” Kataria, a Detroit-based founder and investor; and Ted Serbinski, a Detroit startup investor.
The Midwest fund, which has yet to close, plans to invest in 30 to 40 companies over the next two years, writing checks between $50,000 and $100,000. It aims to be a source of early capital for founders raising at the pre-seed and seed rounds, which is an especially challenging pain point for many startups raising funds in the Midwest, Fried said.
"If you look at venture funds, notoriously the Midwest is a little more conservative with some of their investment mandates," Fried said. "So there’s already a shortage of venture capital in The Midwest relative to the coasts. Then there's a huge shortage of early capital."
The Midwest Fund hopes that its founder-led approach can help address this gap for local founders, and help successful founders support the next crop of startup leaders. Fried's startup ExplORer Surgical, a health care startup that provides a “digital playbook” for hospitals and device companies, has raised $9 million over three rounds since it was founded in 2015.
"There are really good communities of founders that start to get formed in local communities," Fried said. "This is an opportunity for me to continue to be a part of the community but also do it in a way where we can funnel more capital into these early stage founders, and create more of a community that connects them to Chicago and the broader Midwest."
LPs in the fund include Jellyvision CEO Amanda Lannert and Patrick Colletti, the founder of Pittsburgh-based Net Health.
