GRAND RAPIDS — A new venture capital fund in West Michigan closed on its first deal this week. Grand Ventures I LP was part of a syndicate of investors that invested $3.5 million in Cincinnati, Ohio-based Astronomer Inc., a company that provides a platform for clients to collect and analyze data.
The deal came after Grand Ventures — which targets co-investments toward early-stage companies in the Midwest — looked at 400 investment prospects since forming in January. Closing its first investment gives the new venture capital fund added validity in the marketplace, said Maitlan Cramer, a principal with the firm.
“It definitely establishes credibility for us and shows that we’re actually doing deals here,” Cramer said. “It’s kind of nice to get the first deal under our belt and get out there and market and have people see that deal so it keeps building the pipeline for us. At the end of the day, we want to make sure we have a strong deal pipeline so we’re investing in quality deals.”
Grand Ventures could close two or three more deals within the next few months and make three or four co-investments in 2017. Grand Ventures expects to look at 1,000 prospects this year and “we’re on track for that,” Cramer said.
The venture capital fund connected with the two-year-old Astronomer Inc. through a network of investment advisers, he said. The company has been operating out of CincyTech, a business incubator.
“Grand Ventures believes a company’s ability to understand and better serve its customers using data is an increasingly important differentiator. Those companies that most effectively access, analyze, and incorporate data and analytics will be top performers,” said McKeel Hagerty, a co-founder and managing partner at Grand Ventures. “Companies like Astronomer that empower data insights will help create and capture tremendous value.”
Haggerty said the fund expects to make more investments “in line with this thesis.”
Grand Ventures invested in the company with U.K.-based Frontline Venture, Chicago-based Drummond Road Capital, Core Capital Partners in Washington, D.C., and M25 Group in Chicago. Silicon Valley Bank also provided debt financing for the deal.
Grand Ventures will invest $1 million to $3 million in early-stage capital in each deal and provide “strategic support” for startup businesses involved in agriculture, manufacturing and transportation, co-founder and general partner Tim Streit told MiBiz in February. The fund will pursue investment prospects that are nearing or have entered the marketplace with an innovation and have the potential for high growth, Streit said.
In a February regulatory filing, the firm indicated it planned to raise up to $50 million from investors for its first venture capital fund. The firm could close in the coming weeks on its initial fundraising, Cramer said.