New fund hopes to close early stage funding gap

 

In March, Columbus, Ohio-based Rev1 Ventures announced the launch of its Future Value Fund, a $10 million for-profit investment fund. focused on supporting pre-seed stage companies.

Fast Future spoke with Kristy Campbell, chief operating officer at Rev1 Ventures, about plans for Rev1 Fund II and advantages of being located in Columbus.

What’s the goal of this new fund?

Campbell: This fund addresses the gap in early capital, which is real and growing. More institutional venture capital is coming into the Midwest, but that private investment is moving from pre-seed and angel to later stage. As more companies are starting and growing, they have less access to capital. The Future Value Fund is focused on very, very early stage. It is the largest for-profit investment fund focused on the pre-seed that the Columbus region has ever seen.

Why is it important to help startups?

Campbell: As you know, because this is really the voice of your media platform, regions with active startup communities create a lot of goodness. They create twice the jobs and business-to-creation rate as less active startup communities. They also create more skilled talent and corporate partners that want to be near that talent.

Who are the investors in the fund?

Campbell: Rev1 and Ohio State University (OSU) are investors in the fund, and we also receive state support through the Ohio Third Frontier. We’re very blessed to have the Ohio Third Frontier program in our state. They bring matching funding to help us expand the size of the investment fund.

On what verticals do you focus?

Campbell: In general, our program is focused on anything that could be tech-enabled and have high growth. That said, when you look at what we’re good at in the Columbus region, we have a lot of density and enterprise across insurance, financial services, health care, retail, data analytics and enterprise software.

We will fund up to 15 companies. A subset of those will focus on spinouts from OSU in the areas of advanced materials, alternative energy, sensors, hardware, food and ag tech. Then from the community, we will invest in digital health, healthcare IT, HR tech, insurtech, data analytics and enterprise software as a whole.

How do you find the companies you invest in?

Campbell: Anytime you launch a new fund, the entrepreneurs come calling. We also spend a lot of time out in the community networking, not only with our existing clients but also with potential entrepreneurs and research institutions. We have very strong partnerships with OSU and with Nationwide Children’s Hospital. We also keep an eye on our corporate partners so we can work together on their deal flow and opportunities they’re considering.

You also have an internship program there at Rev1, correct?

Campbell: We do. It’s our innovation internship program. We launched it about this time last year, right when the pandemic hit. It’s a program that really helps to give startups a way to find early talent. Moreover, it’s a way for us to help foster new talent that has an entrepreneurial spirit.

It was actually quite interesting, because we were thinking ‘how on earth are we going to be successful here when no one can meet in person?’ It seems we hit the market at the right time, because for a lot of students who had already had their internships aligned for the summer, those internships went away. So we were actually able to place 72 interns across 18 startups last year and saw some really good successes there.

This year, we’ve added a program in which startups can hire a one-year fellow. The fellow is someone who comes on to work full-time and helps to further the operations of the business.

What are the advantages of being in Columbus?

Campbell: We’ve got this very large corporate base. In addition to just having a lot of them, those corporate [entities] are not beholden to one industry. In some cities, you see it’s really heavy in packaged goods or it’s really heavy in retail. Here, we have a huge breadth. You’ve got life; you’ve got insurance; and you’ve got financial services, along with retail, health care and the seat of government.

In Columbus, the secret sauce is that when startups come up with an idea, they have the industry in which to validate the product. Here, we’ve got entrepreneurs more deeply understand the needs in their industries. Therefore, they can more easily connect with the corporate base to validate the product and have their corporate customers potentially become the first sale of that product. They can also become strategic investors and potential acquirers. The corporate base is key, and the talent is key. We’ve got OSU and dozens of other universities that are able to put out key talent as well.