When it comes to backing startups, founders will tell you the best investors are the ones that provide guidance in addition to capital.
And, when it comes to guidance, the best advice comes from investors that have built companies much like the founders they’re investing in.
That’s why a group of local entrepreneurs have come together to launch the newest arm of a founder-focused early-stage venture fund in the Rocky Mountain region.
David Mandell, Cristina DeVito, Judy Zhu and Ari Newman make up the investment committee of The Fund Rockies, an arm of the technology-focused The Fund that launched in New York City nearly two years ago.
Jenny Fielding and Scott Hartley launched the original New York version of The Fund in an effort to help fill a gap in early-stage funding. In just under two years, the Fund NYC has invested in more than 50 portfolio companies and has launched branches in Los Angeles, London and now Denver.
The Fund Rockies will invest in tech-enabled companies at the earliest stages: first check, pre-seed and seed. The primary difference of The Fund from other early-stage investors is that it is entirely founder-driven.
“The best people to help companies grow are the people that have been there and done it before,” Mandell, co-founder of Pivot Desk, told Colorado Inno.
Zhu, who was an early employee at Diapers.com and spent the last handful of years at Uber before moving to Colorado, said she aims to dispel the notion that coastal startups are superior to their landlocked counterparts.
“I certainly understand and am out to buck this clinging to the coast [idea] of ‘this is where the ecosystem is and this must be where the talent is,’” she said. “My goal is to prove that fantastic talent doing massively impactful things does not have to be on the coasts.”
Much like the New York arm of The Fund did, Fund Rockies will look to pool capital, networks and expertise from local founders across the region to launch this first fund.
The founders involved with the fund will help source deals and provide due diligence on them. From there, the four-person team heading up the fund decide where to deploy the checks.
Mandell said he hopes to make between 20 and 25 pre-seed and seed investments using $1.5 million in capital for the first fund. He’s hopeful they’ll begin writing checks in the next couple of weeks.
“We’re not really focused on verticals and industries, instead we’re focused on technology-enabled businesses that have the ability to scale to a venture-scaled business,” he said.
Mandell said the Fund Rockies small, early-stage checks fills a crucial need across the region. He said early-stage funds have morphed into seed and post-seed funds, creating a vacuum for funding that helps founders launch their business.
“It is really difficult to find really good early-stage funds investing in the region,” he said.
Zhu agreed with that sentiment, adding that the first check, regardless of size, can make an enormous impact for a budding company.
“That first check and believer in you makes all the difference in the trajectory of your company,” she said.
With this focus on true, early-stage funding at its core, Mandell said The Fund Rockies will look to back diverse founders with the capital they need to get their business off of the ground.
“Focusing on founders that don’t traditionally look all the same is a huge focus of what we’re trying do,” he said.
Having sat on the other side of the investment table before, Zhu said she’s hopeful the fund will provide more than just capital to a region of early-stage startups.
“Our conviction and hope is that the founder mentality is more on your side. Even if the answer is ultimately a no [for investment], our no comes from a place of ‘and here is the advice that will hopefully be useful for you,’” she said.
