It didn’t take long for Richmond’s newest VC firm to hit the ground running.
Trolley Venture Partners, a local investment firm created this year to back promising ventures in Central Virginia, closed its first fund in June with $4.2 million in the bank.
Just weeks after, it made its first investment, an undisclosed amount in Richmond-based augmented reality startup ARtGlass.
For founder Brad Cummings, Trolley is filling a gap that he saw years ago in the local startup ecosystem.
His angel group CVA Angels, co-founded with Will Loving, launched in 2015 and through mostly personal connections has helped raise $3-4 million for different early-stage companies in the state.
“A small percentage of that list was being active, and so we went to the rest of the list and said, ‘We know you’ve got some cash and have a risk appetite, so why are you holding back?’” Cummings said. “They said either ‘I don’t have time’ or ‘I don’t have ability to assess these companies.’”
Enter the idea for Trolley, which the group thought could complement CVA Angels without stepping on the toes of other regional angel investors or later-stage investment groups like NRV.
“Trolley is for investors who have not enough time or not enough knowledge to directly fund early stage companies, but want to be a party to it.”
But the fund isn’t aimed at just mobilizing Richmond money – it’s just as much about giving local early-stage startups the funding piece that gets them off the ground before a Series B.
“Let’s take the unnecessary stuff out of the way of these companies,” Cummings said. “Don’t let them fail because they can’t read a balance sheet or do search engine optimization – there’s tons of people who can help them with that. From the funding, we can help them succeed on their own merits.”
He said ARtGlass is the first of about 20 companies Trolley will invest in long-term, but that number is subject to change. Trolley already has wired the money for a yet-unannounced second investment, and plans to close a second fund in late fall.
Trolley is made up of a seven-person investment committee, some with specific fund experience and some who have built successful companies themselves. Its advisory committee comprises 11 people with experience differing from the investment committee, which relies on them for industry-specific expertise during the due diligence process.
The fund’s investment criteria is reasonably lax, with a few major requirements. The startup needs to have a significant presence, if not a headquarters, in Central Virginia – though Cummings said that encompasses most of the state except for NoVa. The startup also needs to already be earning revenue. So if it has in-state impact, some sales and is looking for a sub-$1 million investment, it’s within range.
