Red Cedar Launches Seed Fund to Invest in Cedar Valley Startups
February 5th, 2019
Red Cedar is working to address one of the most sought-after resources for new startups – capital. As a part of their mission to champion innovation and startups, they’ve recently launched the Red Cedar Seed Fund, a strategic fund focused on high-potential, early-stage companies in the Cedar Valley.
The Seed Fund plans to invest a total of $200,000 per year for the next three years, spread among five to eight local early-stage startups. The investment amount for each company varies based on the startup’s needs and plans for the funds, and the fund is still open to bringing on additional investors
Nick Evens, President of The Veridian Group, Inc., stresses how important the Seed Fund is to the local entrepreneurial ecosystem.
“The job of a seed fund is to jump start an idea, a product, a service, an entrepreneur that might not otherwise be able to fund the startup costs themselves. Without seed funding, many companies we know today would not exist. The Cedar Valley is behind many other parts of the state in this aspect of the ecosystem. We have startup resources, but they are not unified so we lose early-stage companies to those other communities. We want to keep them here in the Cedar Valley so they can build here, employ here and live here.”
Funded from the Cedar Valley
The Seed Fund is currently made up of a group of nine investors, eight from the local community and one from Des Moines, all with strong local ties to the Cedar Valley. Investors are from a variety of industries and represent both individual investors as well as local businesses.
“It’s important to have these funds available for local entrepreneurs,” said Ann Lyons, Broker/Owner at Oakridge Realtors. “If lack of seed funding were the main reason an up-and-coming idea or company couldn’t make it, that would be truly unfortunate. We need to prevent that from happening.”
Evens sees the fund as a way to move the Cedar Valley closer to catching up with other entrepreneurial ecosystems in the state and region.
He said, “Veridian is involved in other seed and venture funds, as well as in the entrepreneurial and startup scene around the state. We keep hearing that there is nothing going on in the Cedar Valley. It is like the Cedar Valley does not exist in the statewide ecosystem. We are even hearing that from the highest-ranking state economic development folks. Red Cedar is out to prove that we can get an ecosystem and a pipeline of fundable companies growing quickly.”
More Than Money
Danny Laudick, Executive Director of Red Cedar, explains that the seed fund is far more than just startup capital.
“The Seed Fund provides companies with connection to a group of experienced, serial entrepreneurs who can provide advice, support and connections. Our goal is to help these companies grow, and capital is just one of the components to help with that journey,” said Laudick.
And for many of the investors, the importance is something they’ve experienced first hand.
“We hope the Seed Fund draws new entrepreneurs to the Cedar Valley and encourages those living here to go after their entrepreneurial dreams,” said Lyons. “Oakridge started as a few entrepreneurs, and now we have more than 60 agents. We have a big impact on the community through what we do as a business, of course, but we also do a lot to continually improve the community. I picture the Seed Fund companies doing the same thing.”
Investments So Far
“We initially thought deal flow would be slow this first year, but we’re seeing good momentum overall,” said Evens. “It makes sense for the Cedar Valley to be a focal point of manufacturing and related technology startups, so that’s where we plan to focus. However, we’re open conversations outside of those niches.”
As of the beginning of 2019 the Seed Fund has invested in two early-stage startups:
Look for in-depth profiles on Seed Fund recipients in future posts, and for more information on the Seed Fund—or to express interest in becoming an investor or an applicant—go to www.redcedarcv.com or get in touch with Danny Laudick, Executive Director, at email@example.com.