Dundee Venture Capital is working on raising a $50 million fund to invest in seed-stage startups in the Midwest.
Dundee has already raised at least half that sum for the fund it's calling Fund 2020. It started raising the round a year ago, according to a filing with the SEC.
The firm has made over 50 investments in 20 cities since it was founded in 2010 by Mark Hasebroock. It has a specific investment focus on commerce, construction, logistics, and financial services, and invests in what venture capitalists call the "Mighty Middle," or regions away from coastal tech hubs.
Dundee is based in Omaha but has offices in cities across the Midwest, including one in Minneapolis. It's already made five investments out of the new fund, including co-leading a $2.1 million round of funding for Golden Valley-based fishing startup Omnia Fishing Inc.
Most of Dundee's investor base is other entrepreneurs and family offices. But for this round, corporations are coming in as investors too, including in the Twin Cities, said Greg Beaufait, Dundee's partner in Minneapolis. That's a sign corporations are becoming more interested in their younger competition, he said.
The range of checks Dundee will cut from the fund is between $500,000 and $1 million. The firm will invest in about a couple dozen companies from Fund 2020 and reserve the rest of the cash for follow-on investments, Beaufait said. The firm makes about six to eight investments each year, he said.
Dundee only makes seed-stage investments, which are smaller and come earlier in a startup's trajectory. That's filling a specific need, Beaufait said: While larger, older startups can attract money from the big venture capital firms that congregate on the coasts, it's much harder to get early-stage money in places like the Midwest.
"[At the] seed-stage, it's still really hard to get capital from the coasts to come here," he said.
Dundee previously closed on a $31 million fund in 2017, a year after Beaufait moved to Minneapolis. The fund is Dundee's fourth, but its third made up of outside capital. Its first fund was more of an angel portfolio for Hasebroock, Beaufait said.
