Bend-based Cascade Seed Fund has raised $8 million of its next $10 million fund.
Cascade Seed Fund II has completed its first close and the team can start investing. The first fund was $6 million, after fundraising was cut short by the onset of the Covid-19 pandemic. The managing directors, Julie Harrelson and Robert Pease, have completed all the new investments that can happen for Fund I.
They expect to announce the first investment out of Fund II soon.
This fund will work similar to Fund I. The focus is on tech-accelerated companies and direct-to-consumer companies. They expect about 75% of the fund will go toward tech startups and the rest toward consumer, said Harrelson.
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Cascade writes checks up to $250,000 and reserves funds for follow-on investment. The fund focuses on seed stage and earlier and is usually a bridge between angel rounds and a full institutional round, said Pease.
The fund will also lead a round if needed. The whole point is to help a founder get the capital needed quickly and get back to work on the business instead of the distraction that fundraising can be, Pease said.
“While many venture funds continue to get larger and larger making it harder to invest smaller amounts at earlier stages, we are staying focused on being rightsized for our region both in terms of fund size and initial investment amounts,” he said in a written statement.
Many of the investors from Fund I came back, and about 15% to 20% of the investors are from out of state, the duo said. Institutional investors include Oregon Growth Account and Oregon Community Fund.
Harrelson and Pease have built a process that doesn’t require warm introductions and is meant to be transparent for the founders pitching. They work with an investment committee that consists of fund investors to provide insight for investment decisions.
Cascade Seed Fund grew out of a smaller annual fund that Harrelson started in 2014. Since she started investing there have been several exits including Vancouver-based Hubb, Bend-based Cairn, and Beaverton-based Topbox, which were all acquired earlier this year.
The fund has also broken out the demographics of its investments. Fund I had 30% female founders and 30% founders of color.
“We believe the best returns will come from the most diverse portfolio,” said Harrelson in a written statement. “Overlooked entrepreneurs are all around us and we strive to meet them by doing hundreds of calls per year, having an open and transparent application process, and doing our best to demystify fundraising.”
