Capita3, a Minneapolis-based venture capital firm led by serial investors and entrepreneurs Sara Russick and Pam York, has closed on $1.2 million for its first fund, which will back women-led health startups.
Capita3 will provide seed-stage funding for seven to 10 women-led companies in the Midwest over the next two years, the firm told Minne Inno. Capita3 aims to back startups in innovative health sectors such as genomics, digital health, women's health and food-as-medicine.
Russick and York began raising their fund in April with the goal of reaching $1 million. The firm ultimately closed on $1.2 million in an oversubscribed round with 34 backers, according to a regulatory filing.
Although this is Capita3's first fund, it is far from the founders' first foray into startups or raising capital. Russick is the co-founder and managing director of Gopher Angels, one of Minnesota's most active angel investing groups. Russick also, along with her husband David, founded the company behind Bagster, a fabric trash fab that acts as a portable dumpster, and sold the business to Waste Management.
York's experience includes leading the University of Iowa's technology-transfer office and Atasi Ventures, a firm that advises and invests in startups. She is also a faculty member at the University of Minnesota's Carlson School of Management and a co-founder of Women Entrepreneurs of Minnesota.
Russick and York wanted to use their first fund as an opportunity not only to attract attention from experienced investors, but those curious about investing in a startup for the first time.
"There are so many people who don't think they can't do this, but really it comes down to education," Russick said.
The team exercised their networks and held a series of informative sessions to track down and educate new investors. They declined to name specific backers, but said that several in their recent round were first timers.
Education is core to Capita3. Since it was founded in 2016, the firm has offered a series of business development sessions intended for women entrepreneurs looking to boost their business skills. These sessions have been Capita3's core offering and main focus for much of the past two years.
The leadership program consists of four three-hour sessions over the course of 21 days. The sessions are intended for women "preparing to produce a milestone," such as seeking financing or expanding their business.
"You can put money in a company, but that doesn't mean it'll be successful," York said. "It's important to build and strengthen the entrepreneur first, which is what these cohorts do. It's a value-add that few are focused on."
The classes are small, usually maxing out at around a dozen women. Russick and York said that they have run eight cohorts through their program so far – about 50 women total.
Through Capita's leadership sessions and first fund, the firm hopes to increase the number of both women investors and entrepreneurs in Minnesota.
"Venture capital is shaping the world and there are very few women at that table," Russick said. "We want to keep making connections and meeting with women passionate about startups, but who maybe have encountered accessibility issues. That's where we can help."
