UPDATE: APRIL 29, 2020
On March 23rd, I notified my fifteen independent investors that I was ceasing efforts to raise an early-stage venture capital fund and released them from their commitments. My fiduciary duty was to create investment value and return to these individuals. Given the state of fundraising conditions, the enormous uncertainty being introduced by Covid-19, and the fact that I had an opportunity to release their commitments at an optimal point to pursue other investment opportunities, the decision was clear and aligned.
During January, Bold Coast had held a first close and seen continued fundraising traction in January and February. However, the Covid-19 crisis started affecting investor interest by late February. By mid-March, as we all know, the world had changed. Given my experience with investing throughout periods of volatility and world events, I knew the prospects for me reaching the finish line of $10M had deteriorated substantially and that the timeframe to raise the remaining dollars would be extended significantly and would be uncertain.
I invested two and one-half years building out the fund and attempting to raise funds. I was diligent in constructing the strategy, recruiting a team of industry experts to serve as advisors, fundraising, and engaging with the entrepreneurial community. The decision to end my pursuit was seamless and transparent for all committed investors and I was upfront about my intentions and timeframe with the investor and entrepreneurial communities.
Maybe if Covid-19 had struck at a different point in my process, my decision would have been different. However, I assessed the willingness of the community to support my efforts as low and decided to move on given the prospects for fundraising.
While Covid-19 created a unique ending to the pursuit, my inability to raise the necessary independent funds was directly related to the lack of local financial support, specifically by the institutional capital of Milwaukee. Thirty-five percent of the money I raised was from out-of-state investors. I did not receive a single commitment from an academic institution, a corporate entity, or an “old money” Milwaukee investor or family office.
Raising a geographic fund is naturally dependent on local financial support. The failure of the Milwaukee investor base to financially back my efforts speaks to the systemic challenges the city faces in building a stronger entrepreneurial community that can compete in 2020.
More importantly, entrepreneurial efforts and investments can be the foundation for a more diversified next generation of businesses, wealth creation, and economic development in our community. All of these dynamics are instrumental in supporting the city’s vital philanthropic organizations, filling excess commercial real estate, and driving essential population growth.
I certainly have earned the right to speak candidly and more extensively about the challenges, behavior, and issues I encountered and it would be on-brand to do so. However, given the situation we all face in Covid-19, our community needs to remain focused on minimizing the spread of the virus, supporting our health care systems and their workers, and getting our struggling local businesses across the economic chasm. Exploring the challenges and my experience now would not do them justice and simply be a distraction from the more pressing and critical needs of Milwaukee and Wisconsin.
I would like to thank the Badger Fund for the opportunity to participate in the fund-of-funds program, their mentoring and education resources, and their belief in my capacities and potential as a fund manager. Wisconsin will be a stronger entrepreneurial system given your efforts. To the other fund managers in the Badger Fund-of-funds program, thank you. I enjoyed the camaraderie and intellect each of you brought to all of our discussions. I wish all of you the best in leading the state and its entrepreneurial pursuits forward. I would like to thank the investment committee members and consultants that supported me throughout the experience. You provided strategic perspectives, a reliable sounding board, and were diligent supporters throughout the ups and downs. To my legal team, your work was crisp and guidance sound – thank you for your counsel. I would like to thank my design team. You knocked the branding out of the park with flair and creativity. To the individuals that provided sincere help with fundraising, thank you. Raising money is a lonely road and the introductions and assistance in navigating those conversations is a testament to your character. To the fifteen independent investors that stepped up and committed to the fund, I appreciate your trust in my capacities and investment abilities. Thank you for supporting entrepreneurial pursuits and my efforts.
And finally, to my family, I cannot express how deeply appreciative I am of your patience and support throughout the process. Entrepreneurial activities at their core are about faith. Faith in an idea – faith in how the world could work – faith in people and their earnest drive and potential. You have backed me in every way possible and I am forever grateful.
I look forward to continuing to engage with the venture community in Wisconsin and listening to/providing perspective for entrepreneurs. If people have questions regarding my decision and experience, feel free to reach out. I am happy to share my experiences and perspectives on the prospects for the city of Milwaukee, the state of Wisconsin, and its entrepreneurial community.
So, with that, it is on to what’s next. I promise to maintain the Bold Coast Pipeline and have already transitioned the website for the next chapter and future writing. It is funny – I have never pursued writing much in life and found the activity quite enjoyable over the last year. The craft of storytelling to share an idea is a wonderfully creative and rewarding experience. I hope to find inspiration and share it with you on the Pipeline.
I wish all of you the best navigating the days ahead. Be safe and enjoy the emergence from quarantine. We have all earned the opportunity to reconnect with the world and refresh our spirits!
Best,
Ross Leinweber
Bold Coast Capital