A venture capital fund, the Startup Capital Ventures x SBI Fund, closed on its final funding round last fall and is now seeking innovative startups — including those based in Hawaii — to add to its investment portfolio.
Startup Capital Ventures x SBI Fund is an early-stage venture capital fund that aims to “help innovative founders grow their companies by providing funding, guidance and being thoughtful, kind and engaging partners,” as the mission statement on its website states.
This marks the third fund to come out of Startup Capital Ventures — a venture capital firm that was founded in 2005 and has offices in Menlo Park, California, and Honolulu.
Donavan Kealoha, the Hawaii-based managing partner of Startup Capital Ventures, told Pacific Business News that the Startup Capital Ventures x SBI Fund has invested in five companies to date out of the new fund — and that the firm intends to fund a total of 20-25 companies over the next few years.
Kealoha told PBN that Startup Capital Ventures x SBI Fund opened to investors in 2022 and had its final closing round in October 2023. He declined to disclose the total amount of the fund, but noted that “it’s a good sized seed stage fund.” He also shared that the initial funding amount for each portfolio company would range between $750,000 and $1.2 million.
“The goal is to try to invest in another five or six startups this year in addition to continuing to support our existing portfolio companies as they have subsequent funding rounds. We have a couple of them that are growing, hiring, generating more revenue,” said Kealoha, who also is the co-founder of local tech education nonprofit Purple Maia Foundation.
He said that the fund focuses primarily on seed stage companies — meaning those with a product or service in market with “indications of traction” — in the business-to-business space, primarily on the West Coast or in Hawaii. Startup Capital Ventures x SBI Fund is geared mostly toward software and technology, including fintech, software as a service, and deep tech, among other categories.
When it comes to finding companies to invest in, Kealoha said he is “always networking” to find new prospects. Leads come from a variety of sources, he said, including other venture capitalists, service providers that work with startups, networking events and more.
“We will meet as many companies as we can. We looked at 500, 600 companies last year, so we are constantly looking at companies,” Kealoha said. “Those companies that fit our strategy and criteria, we will spend more time learning about them — the founders, the market opportunities, their competition. Typically, these companies are trying to raise money to hire more people or bring on more resources to grow and scale, so they are actively seeking out folks, too — it’s kind of a match-making game you’re playing.”
Among the five companies that Startup Capital Ventures x SBI Fund has invested in so far, two are from Hawaii: Shifted Energy and Reef.ai.
“My hope is to be able to invest more into Hawaii. … I hope that this can just be the start of more companies getting funded, deciding to stay here and grow their companies here,” Kealoha said.
Although Startup Capital Ventures x SBI Fund is not exclusively for Hawaii companies, helping local businesses is part of Kealoha’s goal.
"We can be helpful even to those companies that we cannot necessarily invest in,” he said. “I see it as our obligation here in Hawaii to try to grow the ecosystem, so that means spending time with companies, even if we are not going to invest in them, making introductions where possible — spending maybe not actual capital, but social capital to help them move forward and to help the Hawaii ecosystem continue to expand.”
