Seattle venture capital firm Fuse is on the lookout for Portland-area investments. And its eyes and ears on the ground is Vancouver entrepreneur and investor Ryan Fink.
It’s all part of the new(ish) firm’s thesis that the Pacific Northwest “is one of the most tech-rich ecosystems in the entire world,” said General Partner Brendan Wales.
Fuse has a $173 million first fund. It has already made 24 investments and plans to make about eight to 10 new investments a year. It launched in 2020 and spun out of another Seattle firm, Ignition Partners.
The firm is mostly focused on Series A level rounds and writes checks between $1 million to $10 million. However, if the partners know an entrepreneur well they will make earlier investments.
The fund usually acts as a lead investor. It backs business-to-business startups that are typically building business application software with some sort of artificial intelligence or machine learning component.
“It could be infrastructure for machine learnings or AI, or applications that automate tasks,” said Wales, noting that the firm’s portfolio includes construction software, travel software and insurance fraud detection. “Anything to enhance human productivity.”
The fund’s interest in Portland stems from the experience its founding partners had while they were at Ignition investing in Portland startups, and the fund has a lot of its limited partners in the Portland area, said Wales.
In fact the founding partners were investors in Fink’s last company Streem. After the startup sold in 2019, Fink became an investor in Fuse’s first fund. The tight relationship he had with the partners led them to designate Fink as a scout for Fuse.
"Two years ago, thinking how to get good coverage in Portland with someone who is hustler and detail oriented," Wales said. “He was the first venture scout. It’s been a huge success,” said Wales.
As Fink comes across startups and founders he passes info on to the Fuse team.
"Our mission is to know everyone who is thinking of or has started a company. We want to make sure we know the founders and the founders know us," Wales added.
Venture Capital is an industry built on relationships. When a founder meets an investor it can often be years before an investment is actually made.
What Fuse looks for in an investment
For Fuse, the firm looks for founders and teams that have “unique insight” into the ultimate problem their product is designed to solve. This means working with founders who have domain expertise in what they are doing and their understanding of a problem is the spark that led them to start the business in the first place, he said.
Someone who has market mapped categories to try to glean what the next big thing will be is likely not a fit, Wales said.
“We need founders with passion and insight. Ideally the product is already built and they have something on the market getting customer feedback,” he said.
“There is no reason a company shouldn’t have a lot of customer feedback,” he added. “Get a basic product out and get in front of customers is low-hanging fruit.”
Fuse also looks for founders that have ambitions to build large public companies.
Fink has recently moved from investor and scout into Portfolio founder for Fuse. The fund was the lead investor on a $7 million round for his new startup Digs, which he is building with repeat co-founder Ty Frackiewicz.
