VIPC partners with VC funds to invest $100 million in 100 startups

The Virginia Innovation Partnership Corp. is partnering with seven venture capital fund managers to invest $100 million in 100 Virginia-based startups.

Through the partnership, announced May 20 by Gov. Glenn Youngkin and named Virginia Invests, VIPC will commit $40 million to the seven funds using previously awarded funding from the U.S. Treasury Department’s State Small Business Credit Initiative. In December 2022, Youngkin’s office announced that Virginia had been approved for up to $230 million from the SSBCI program, with about $173 million of that going to VIPC.

“The lifeline of a high-growth entrepreneurial ecosystem is the ability to tap into capital,” Youngkin said, “and that’s exactly what Virginia Invests is all about. How do we accelerate growth? How do we amplify good ideas? How do we unleash opportunity by bringing together people who want to invest in all of this and people who need the money to make it go?”

The funding firms have committed an additional $60 million, and they will select the 100 high-growth startups to invest in during the next three to five years. By contract, firms not headquartered in Virginia will have to provide 1.5 times the funding they receive, while firms headquartered in the state will make a 1:1 match, Youngkin told reporters.

“One of, I think, the really important steps was to recognize that picking companies is not something that we should do,” he said. “We should invest in funds that are picking companies, and that also allows us to have the ability, if companies are doing well and more capital is being put to work well, then potentially, we could invest some more. But the resources and the expertise that are represented by these seven funds in particular deep sectors is unique.”

The seven fund managers focus on founders who are typically underserved. They are Washington, D.C.-based 100KM Ventures; New York-based AIN Ventures; Houston-based The Artemis Fund; Portland, Oregon-based The BFM Fund; Chapel Hill, North Carolina-based Idea Fund Partners; Atlanta-based Valor Ventures; and Tysons-based Veteran Ventures Capital, which recently moved its headquarters from Tennessee to Virginia.

“This is the first round of [funding] commitments. There’ll be more,” Youngkin said.

The nonprofit operations arm of the Virginia Innovation Partnership Authority, VIPC provides strategic commercialization and funding support to Virginia-based tech startups.