One of Colorado’s most active early-stage investors has raised a new fund that positions it to take advantage of the state’s blossoming startup ecosystem.
Today, FirstMile Ventures announced its second fund with $21 million in committed capital to back seed-stage startups. The venture firm said it plans to make 30 initial investments between $150,000 and $600,000 into pre-seed and seed-stage technology companies over the next three years.
With this new capital on board, FirstMile Partner Aaron Stachel, who is based in Denver, said the company is taking a similar strategy as it did with its first $6 million fund, but with an increased ability to write larger checks.
“When we get excited about a company, we now have the capacity to put a term sheet down and be a catalyst to get that round closed,” he said.
After a Covid-19 delay, the company made its initial close in July 2020 for this fund. Stachel said FirstMile had first targeted March 2020 for the close but was forced to wait as investors were hesitant in the early months of the pandemic.
Since that initial close last summer, the fund has already made 12 investments. Consistent with its history, FirstMile will continue to focus on investing in technology companies across North America and, so far, two-thirds of the firm’s portfolio has been comprised of Colorado-based startups.
And, while FirstMile has traditionally invested in business-to-business software companies, Stachel said the new fund wouldn’t be limited to that “comfort zone.”
“Being based in Colorado and having strong networks and lots of deal flow here, we’ve taken the approach that we’d rather open up the types of things that we’d do and not miss the next big thing in our backyard, than have a more narrow technology focus,” he said.
In the past, FirstMile has invested in local success stories like Pax8, Halp, Left Hand Robotics and more. The firm was started in 2015 by founding and managing partner Bill Miller, along with Stachel.
Of the $21 million raised, $7 million came from Colorado’s Venture Capital Authority (VCA), a state-supported program designed to drive capital to Colorado startups.
“FirstMile Ventures, the VCA’s fourth fund, is another example of the state’s deep commitment to Colorado’s entrepreneurial ecosystem. Not only will the VCA’s capital continue to fund local entrepreneurs and innovators, but we are fortunate to be able to support a local venture fund dedicated to funding seed-stage companies in Colorado” Eric Drummond, chair of the VCA, said in a statement.
Colorado’s venture activity has reached a crescendo in 2021, with startups across the state smashing records for capital raised. Despite that activity, Stachel said things have been quieter for early-stage deals.
With FirstMile’s focus primarily on deals that range from $500,000 to $2 million, he said the firm prioritized raising a larger fund to help be a local leader.
“A lot of those fundraisings are under the radar, it’s a lot harder to get out of state capital to come do those deals,” he said. “That’s one reason we felt really strongly that we needed a bigger fund to lead rounds in those most early of stages.”
A previous headline for this story referenced the incorrect amount raised by FirstMile Ventures. The correct amount was $21 million.
