Valley Growth Ventures, a micro-investment capital investment fund launched in 2016, has closed fundraising at $6 million and is actively seeking investment opportunities.
VGV , which is managed by Ernie Knight — who is president of the management consulting firm Knight & Associates and an adviser to Adsorption Research Inc., a testing and analysis laboratory based in Dublin, Ohio — focuses on growth capital for startup companies primarily in the software, energy, advanced materials and additive manufacturing industries.
Its funds comprise $3 million from 44 private investors, in Ohio and elsewhere, that was matched by $3 million from Ohio’s Third Frontier Pre-Seed/Seed Plus Fund Capitalization Program.
VGV was started as a partnership between the Youngstown Business Incubator, Mercy Health, Tech Belt Energy Innovation Center, Youngstown State University Research Foundation and the Mahoning Valley Economic Development Corp. The fund is the first to be supported by that level of collaboration in the Youngstown market.
“We at VGV are excited to be the new venture capital player in Ohio. Our model is unique to the Mahoning Valley, leveraging the many great assets provided by its incubators, businesses, universities, and institutions,” Knight said in a statement. “We are looking forward to investing in a strong portfolio of companies that will generate significant returns to investors — and bring jobs to the region.”
VGV spokesman Corey Patrick said he wasn’t sure if there is a minimum or maximum level of investment the fund would make in any one startup. However, smaller investments from micro VC funds tend to be in the range of $25,000 to $500,000.
Emphasizing the fund is “fully operational,” he added that at least one health care-related company already is in talks about getting some funding, though it’s unclear whether that deal will go through.
Other applications are being accepted by firms working in business-to-business software, IT, energy, additive manufacturing and advanced materials. The preference is for Ohio companies, particularly those in Northeast Ohio and the Mahoning Valley.
“Access to capital is always a struggle for companies at this stage, so having a fund like Valley Growth Ventures will help our start-ups get to market faster,” said Youngstown Business Incubator CEO Barb Ewing in a statement. “And, since deals follow the money, it should also help to attract new companies to the region as well.”
The fund closes as the global venture capital scene saw its fourth consecutive year for fundraising topping $40 billion, according to research firm PitchBook. There was $42 billion raised in 2017 with 294 funds closing. And those figures follow a big year in 2016, when an industry-record $51.8 billion was raised through 384 funds.