Investing In Your Backyard: Regional Capital

Investing In Your Backyard: Regional Capital

Raising capital for entrepreneurs in our local economy is not just an investment decision. It can also be a great way to support innovation and growth where you live.

Many of our current, and hopefully future, clients have benefited from the Seattle region’s unique business climate, and participating in the seeding of new, high-growth companies will help ensure that ecosystem of technology and innovation continues to thrive.

Of course, investing in start-ups is not for everyone. There is significant risk involved and your investment is not liquid. But having the resources to generate capital regionally is critical to the economy, and we believe cultivating those resources is important.

Chris DeVore (picture above) is a director at Techstars Seattle, and a partner at seed-stage investment fund, Founders’ Co-op. Founders’ has provided seed investments for a number of local companies and recently put together its third, “first-dollar” funding round of $20 million for local, high-growth tech companies.

In the latest post on his Crash/Dev blog, DeVore explains the problem of capital flow, when it comes to funding smaller, regional startups.  While there is more good capital out there than good investments, most of that capital is held by large institutional investors, and doled out in large increments to large, mature companies, he explained. For various reasons, large funders are not well equipped to allocate smaller blocks of capital to young, high-growth companies. That’s where regional capital comes in.

Devore spells out four ways to encourage the flow of regional capital:

  – Support and invest in funds that raise money for local, early-stage companies.

  – Support the creation of new intermediaries for seed funding.

  – Share information and best practices.

  – Spread stories of success.

 

Unblocking capital for local markets is something Highland supports. Founders’ and funds like it can be unique investment vehicles for high net worth individuals willing to accept the risks involved with being a ground floor investor.

The Seattle area has a world class track record as an incubator of some of the most innovative and profitable companies (i.e. the next Amazon, Starbucks or Blue Nile) and we think supporting that ecosystem in any way helps make your community a better place. If this is the place you intend to stay and the place you expect your children and grandchildren to grow up in, it only makes sense to personally invest in its growth and prosperity.

 

John Christianson
john@highlandprivate.com
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