In a red, grid-lined journal, Beth Engel outlines a note in large block letters.
With each stroke of her pen, “HUSTLE” grows bolder.
As though to protect the musing, the venture capitalist of three years adds a box around the reminder before once again tracing over the word. Engel continues to sketch as she eloquently relays her observations on regional venture capital and the pace required to fuel entrepreneurs’ firms in the Midwest.
“It’s going to take hustle on our part to go out and play offense,” said Engel, a partner at regionally-focused Dundee Venture Capital. “I fully expect that there are deals to be found — it’s not like we’re saying ‘Come to me’ It’s easier to do it organically instead of transactionally.”
The haste and hustle of entrepreneurship are not new to the region, though Engel’s empathetic approach with Dundee’s latest fund may be.
Engel’s organization is now in the midst of deploying its third fund, which recently closed on $20 million. Dundee in September announced it has raised two-thirds of its targeted $30 million fund for startup deals in Kansas City, St Louis, Omaha, Lincoln, Denver, Indianapolis, Minneapolis and Chicago.
Ultimately, Engel said she hopes Dundee is a part of making the world of venture capital more understandable.
“I’m an optimistic person — I try to connect with people and help people,” Engel said while smiling. “I really want to debunk the mystery of working with VCs.”
With a promise of transparency to prospective portfolio firms, Dundee typically invests $250,000 to $750,000 per deal in startups in the greater Midwest. The fund targets high-growth, early-stage tech firms — especially those in e-commerce, software-as-a-service and consumer networks.[pullquote]“You should be thoughtful about taking on capital because you actually now have an owner-partner.” – Beth Engel[/pullquote] Dundee plans to make about four lead seed investments per year with the hopes to add about 20 total new startups in its portfolio. Typically, Dundee looks for regional investment partners to syndicate on the deals, making the average round it participates in upwards of $1 million. Engel said that Dundee’s most recent fund relies heavily on a base of limited partners in the Omaha area.
While Dundee’s investment thesis remains largely the same, Engel said that the organization has learned a lot from its prior funds — its first of $2.5 million and its latter of $18 million. Engel said that Dundee’s leadership has improved their pattern recognition of potential challenges with a founder, business or market. Dundee also will be more cognizant of making deals that are positioned for follow-on funding rounds that it can join, she added.
Dundee won’t simply provide funding but, Engle said, it rather wants to be a useful member of the company’s team.
“For us, we take on the challenge of helping (startups) grow fast,” she said. “It’s a good consideration of a founder to say ‘What’s the vision I have for the business.’ … You should be thoughtful about taking on capital because you actually now have an owner-partner.”
In addition, the fund is implementing a broader strategy to better excavate opportunities. Engel said she’s personally traveling more frequently to Kansas City to talk with founders. Dundee also has planted a full-time team member in both Chicago and another in Minneapolis. More personnel in top Midwest entrepreneurial hubs should enable better opportunities to build relationships, she said.
The Omaha-based fund is no stranger to Kansas City. It already has invested in a host of area firms, including Divvy HQ, Pathfinder Health Innovations, MySideWalk, Leap.it and Briefcase.
Engel said she hopes to replicate its success in the area.
“We deployed a third of our last fund in Kansas City and we want to do that again,” she said. “Kansas City is central to this (strategy). We want to look back in 10 years and say ‘We had some great deals in Kansas City.’”
