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$2.25M private investment fund created for startup companies
YOUNGSTOWN
U.S. Rep. Tim Ryan announced the creation of a $2.25 million private investment fund from venture capitalists to provide money to startup companies in the Midwest, including the Mahoning Valley.
The Comeback Capital Fund was established as the result of a February bus tour of five cities – Youngstown; Akron; Detroit; Flint, Mich.; and South Bend, Ind. – with venture capitalists organized by Ryan, of Howland, D-13th, and U.S. Rep. Ro Khanna of Fremont, Calif, D-17th.
The fund was created to attract investments from the East and West coasts to the Midwest, Ryan said. There are about 35 partners in the fund, he said.
“The fund will be seed money to leverage other outside money for companies that have the potential to grow but don’t have access to capital,” he said at a Tuesday announcement of the fund at the Youngstown Business Incubator.
Ryan added: “This fund will invest directly into new companies across the Midwest and help our economy grow.”
The fund is targeting pre-seed-stage companies whose customer base lies in the Midwest and that should stay in the Midwest.
“Startups serving customers in the Midwest should not move to San Francisco to raise money and then try to serve customers in Youngstown, Detroit and Indianapolis from California,” said Scott Shane, the fund’s managing director. “The capital should move here instead.”
“Access to capital is the biggest challenge our portfolio companies face,” said Barb Ewing, YBI’s chief executive officer. “This fund will provide our companies with another avenue for finding the resources they need to go from concept to product.”
Each of the fund’s partners have agreed to advise at least one company in the fund. The concept is to build the network ties between Midwestern startups and coastal investors.
“This is about plugging these businesses into the national and global capital market,” Ryan said. “My strategic goal is to convince venture capitalists there are opportunities here.”