VIPC launches $100M fund partnership for Va. 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 Monday 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 100KM Ventures, AIN Ventures, The Artemis Fund, The BFM Fund, Idea Fund Partners, Valor Ventures and Veteran Ventures Capital.

Washington, D.C.-based 100KM Ventures provides pre-seed through Series A funding, focusing on early-stage companies working in the future of work or women’s health. 100KM Ventures plans to partner with Virginia’s historically Black colleges and universities, said founder and Managing Partner Shalanda Armstrong.

New York-based AIN Ventures is a pre-seed and seed-stage fund that invests in veteran-led companies and in companies “at the intersection of deep technology and dual-use,” co-founder and General Partner Emily McMahan said. “We are particularly excited about Virginia because of the emerging life sciences research ecosystem, as well as software development,” McMahan said.

Startup founders will also have access to AIN Ventures’ Academy Investor Network, a syndicate of graduates from the five U.S. military service academies that invest alongside AIN and help with deal-sourcing, vetting and providing post-investment support.

The Artemis Fund leads seed rounds for female tech founders whose companies are in financial technology, commerce and care. One of the Virginia-based companies in the fund’s portfolio is Naborforce, a Richmond-based tech company that connects older adults to a network of people who can provide help around the home or around town and socialization. The Artemis Fund also plans to hire venture fellows from Virginia colleges and universities, said Stephanie Campbell, a co-founder and general partner.

The BFM Fund is an industry-agnostic seed-stage venture fund focused on founders who are Black, Indigenous and people of color. The firm is based in Portland, Oregon.

Chapel Hill, North Carolina-based Idea Fund Partners provides pre-seed and seed capital to technology companies in overlooked geographies or with overlooked entrepreneurs, said Managing Partner Lister Delgado.

“We are very excited to be working with South, Southwest Virginia and the Shenandoah Valley, and we are looking to develop strategies and develop entrepreneurial community,” he said. The firm is opening an office in Richmond.

Valor Ventures, an Atlanta-based seed-stage lead firm, is focused on B2B software and AI startups in the southern U.S. The firm has a podcast with more than 50,000 listeners, said investor William Leonard, and will be extending it to Virginia, focusing on founders, ecosystem builders and investors. Valor Ventures also plans to bring its VC Day, a private, investor-centric conference focused on bringing $5 billion of capital to Virginia.

Veteran Ventures Capital focuses on investments from the late seed through series A and B funding rounds in veteran-led companies creating dual-use technologies that have military and commercial applications. The firm relocated its corporate headquarters from Tennessee to Tysons, said Josh Weed, a general partner at Veteran Ventures Capital.

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

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