One of the newest early stage funds targeting Pittsburgh tech startups has had capital in place to invest for several months but has yet to write a check to a local company.
The Fund Midwest, in fact, has made investments in other markets — three in Chicago, two in Detroit and one in Indianapolis. Combined, the dollars add up to $300,000. It covers six states.
Its Pittsburgh founding general partner said the lack of local investments links to the short supply of next-stage size investors. Since The Fund Midwest’s average check size is $50,000, that’s “a drop in the bucket” in a $500,000 to $1.5 million funding round, Lynsie Campbell said.
“While several founders in Pittsburgh have pitched our investment committee, none of them has been able to bring a lead investor to the table,” Campbell said. “This is extremely frustrating and a huge disappointment for me personally. I was hoping to be able to have a bigger impact on the startup community in our region, but without investors who are willing to set terms and write $150,000 to $200,000 checks, our impact has been nominal. On the flip side of that, founders in deep tech who are coming out of (Carnegie Mellon University and the University of Pittsburgh) have received enough support through the universities that their first VC rounds are bigger — and more expensive — than we can support.”
Still, Campbell hopes to make at least one Pittsburgh investment by year-end. She is working closely with several young company founders to help them secure a lead investor which would, in turn, give The Fund Midwest the opportunity to “finally” support a local startup.
“This is something that we haven’t had to do in other cities,” Campbell added, “but I’m willing to put in the extra time and effort to make it happen.”
Campbell is a repeat entrepreneur, and was recently chosen by the Pittsburgh Regional Alliance as its first startup czar, but the struggle to find lead investors surprised her.
“Based on my personal experience, I know that it's hard to raise a substantial seed stage round of funding here, but I didn't realize just how hard it is for founders outside of the traditional networks,” she said.
Campbell had announced The Fund Midwest’s debut in February and initially hoped to cut its first check to a Pittsburgh startup in March and anticipated making two local investments per month.
The Fund Midwest is part of The Fund Global, launched in 2018 in New York by Jenny Fielding of Techstars NYC and Scott Hartley, author/investor, to build a community of founders who invest in mission-driven, technology-enabled early stage companies. The concept spread to other regions and now counts more than 500 founders and operators. Last month, The Fund Global announced The Fund XX was ready to invest in early stage companies founded by women. All of the entities under The Fund Global’s umbrella work collaboratively.
