As it has in other industries, the COVID-19 pandemic has changed the venture capital world. One positive change is that it has given VCs more opportunities to learn about innovations taking place in smaller communities.
In other words, today’s Zoom-based world has made it easier for VCs to meet startups in locations outside their own geographies, which are typically in bigger areas like Madison, Milwaukee and Green Bay.
Arbre Technologies, located in Stevens Point, Wis., has been a beneficiary, according to CEO Matt Vollmer.
“It is much easier to spend 30 min. qualifying an opportunity virtually, than it is to commit to travel and other expenses,” Vollmer said. “Virtual is incredibly more efficient and can be just as effective.”
Arbre Technologies, which aims to revolutionize asset management for tree nurseries and other green asset companies, formed in 2016 and has raised $655,000 with help from the Winnebago Seed Fund and BrightStar Wisconsin Foundation.
Kyle LaFond, founder of Blue Mounds, Wis. based American Provenance, also has taken advantage of the shift in fundraising tactics.
“Prior to COVID-19, we would have to rely on events, networking opportunities, warm introduction and competitions to meet investors,” LaFond said. “Now, investors … have the time and flexibility to schedule pitches and presentations (with companies like mine).”
Founded in 2015, American Provenance makes all-natural personal care products like deodorant, skin care and hand soap. The company, which has raised $500,000 with investments from SKU and the Winnebago Seed Fund, won the Greater Madison Chamber of Commerce Pressure Chamber pitch competition in 2019.
Vollmer also noted that investors can now more quickly determine if a startup is the right fit or not.
“I think virtual helps ‘get to no’ much faster, which is good for the founder and the investor,” Vollmer said.
For startups in smaller communities, Vollmer and LaFond have some tips during this COVID-19 pandemic.
“It has never been easier to raise capital beyond geographic boundaries so don’t be intimidated by that,” Vollmer said. “In the meantime, get involved in your local startup community and be part of the solution to establishing proper investment infrastructure for startups yet to come.”
“Always look to connect with new investors,” LaFond said. “Different people may be able to help you out at different stages.”
