I'm thrilled to announce the closing of Firebrand Ventures. We closed it at $17.7 million which was oversubscribed about 250% from our initial $7 million target.
It's been well documented that 75-80% of venture capital goes to California, Massachusetts and New York. While I was Managing Director at Techstars I noticed first-hand that many fundable startups weren't able to raise seed capital in Kansas City or the Midwest in general. Firebrand's mission from day one was to invest in compelling startups outside San Francisco, Boston and New York.
We surrounded Firebrand with a world class network and team. It not only helps us find amazing startups, our portfolio companies can access a huge array of investors, mentors, and potential partners and customers. A big part of my job is making key introductions, often times to other investors to join or lead rounds. Further, our team of advisors and I have been founders ourselves and I believe most entrepreneurs want a more human approach from their investors. Founders want to feel secure sharing not only the good news but also the bad - with investors who know when to listen, when to ask questions and when to offer help. They want a trusted partner and that's what we continually strive to earn, not with talk but with our actions.
Investment Criteria
While not all startups will fit our criteria perfectly, here are the key elements we look for:
Team: More than anything, we invest in exceptional founders: obsessed with solving a big problem in a better way, with top notch technical and domain expertise. And by “exceptional” I don’t just mean business skills but also character. We love building relationships with entrepreneurs who are not only intelligent but also have that rare combination of integrity, grit, focus, and audacity. We have a strict 'no jerk' policy and only partner with founders we truly connect with.
Geography: Our primary territory is what we call the "Greater Midwest" which for us is roughly bordered by Austin to Minneapolis, and Boulder to Columbus, OH. We're based in Kansas City which is wonderfully central and makes it easy to travel anywhere to meet founders face to face.
Stage: We're a seed fund, although “seed” is a broad stage these days. Our sweet spot is when a startup is raising $500k-$2M, we’ll invest an average of $200k into those rounds. We reserve multiples of that for select follow on investments.
Capital Efficiency: Living and working in the Midwest costs much less than the coasts. We seek startups with capital efficient business models, such as B2B SaaS for example, that can multiply this financial advantage.
Sectors: We employ a sector agnostic, team-first approach. However given our desire for capital efficiency, this typically rules out sectors like biotech, pharma, and most hardware companies. Regardless of sector, we love discovering products that truly delight their customers.
Status
We take pride in being very active - we’ve already made 12 investments to date. Eleven of those 12 are either headquartered in our Greater Midwest territory or will have a significant presence there. We’ve co-invested in all 12 but can also lead. We’ll continue making 10-12 investments per year during our active period, investing in a total of about 35 companies. We’ve co-invested with top funds including Union Square Ventures, Foundry Group, and Techstars Ventures.
We’ve built a world class team around the fund. I’m honored to have such amazing advisors as David Cohen, Techstars CEO and early investor in Uber, SendGrid, Twilio, and many others; veteran VC Tom Ball who founded Next Coast Ventures in Austin; and Keith Harrington, experienced VC and Kauffman Fellow who founded Novel Growth Partners in KC. It's incredible to have a bench this experienced and helpful.
Founders = Customers
I’m very grateful for our LPs that made this fund possible. Just like our LPs are our valued partners, founders are our customers. Our purpose is to delight our customers with the experience, network and human approach we bring to the table; to help them grow seed stage startups into thriving businesses.
Business and life are all about relationships - the people we choose to surround ourselves with. Whether it’s our team members, co-investors or entrepreneurs, we seek like-minded people who value honesty, transparency, and inclusivity. In other words: being good, active participants in the ecosystem and doing business the right way. Now that Firebrand is officially closed, I look forward to continuing our mission of supporting amazing founders on their journeys. Onward and upward!