The funds are coming, the funds are coming....
Despite Gurley & Wilson talking about over-valuation for later stage deals that they are seeing in the valley and elsewhere that has been a lot of recent activity in the Northwest related to investment capital. Just this week, there have been a flood of announcements about funding coming online for startups in the area. We saw announcements that a new venture fund launched, Tola Capital has $33 Million raised and is trying to grow to $150 Million. We saw Draper Fisher Jurvetson's Bill Bryant talking about the $50 million in venture funds he wants to put to work here in his new role as partner focused in our area. Lighter Capital increased their funding base to $17 Million (although they are investing those funds all over the country). It doesn't stop there though, Providence announced a $150 Million venture fund. Finally, last week we heard about Kurt Delbene (a local technologist with plenty of roots in the area) joining Madrona.
There was also a hint at the underlying angel fund activity that is going to become available for the earlier stage companies that Tola, DFJ, and others will need to have a healthy stock of to choose the best ones to keep funding. From what I can tell, there are plenty of new organized groups putting together smaller earlier stage funds. There is also an increase in the amount of work going into helping private individuals add early stage companies to their portfolios by direct investment.
Add to all this recent activity, the dearth of announcements from earlier in the year. We saw the cannabis funding firm Privateer Holdings targeting $75 Million to go into Marijuana related startups. We also saw BC based Boris Wertz start working with A16z to scout deals. Then there was the announcements from Jeff Schrock about their new $100 Million fund.
With just these in mind, that is at least a half a billion dollars in late stage capital with boots on the ground here in Seattle. $500,000,000,000 <- That's a lot of capital to put to work here! With the rest of the DFJ & a16z engines idling nearby and a wealth of investment capital raised in previous years, but not fully deployed that is a lot of capital in need of some great companies.
If you want your share of the half a billion dollars, there are a lot of resources to help. From accelerators like Techstars & 9Mile labs, to business plan competitions, First Look Forum, Startup Weekends, and Startup Next. Need seed capital? We have some of the top kickstarter campaigners in the world in our midst - Dan Shapiro & Marc Burros. We also have a lot of capital going into early companies through forums like the Seattle Angel Conference, Keiretsu, Zino Society, Element 8, TAGS, Founders Co-op, and of course the top 10 angel group Alliance of Angels. The great thing is that it doesn't stop there, there are plenty of seed stage angels who aren't involved in the groups looking to invest directly in startups and a number of people working with startups to help them launch equity crowdfunding via marketplaces like AngelList, FundersClub, DreamFunded, OneVest, & SeedInvest.
If we look at the HALO data, Northwest angel groups alone are investing a fair amount.
Angel investing, or better stated private growth oriented companies will begin to enter more portfolios of accredited an unaccredited investors. Christopher Mirabile (who is interviewed in my book on angel investing) recently published his thoughts over at Inc. on some of the reasons that private growth companies deserve the increased attention they have been getting.