A group of investors plans to raise $1 million to invest in startups in the Hudson Valley.
The Hudson Valley Startup Fund, which officially launched March 31, has 30 investors and $700,000 so far. Johnny LeHane, a founding manager of the fund, said the group will invest between $50,000 and $250,000 each in four to eight companies.
LeHane, a Rhinebeck resident and co-founder of WAKA Kickball & Social Sports, said the fund fills a need for startups in the region looking for money to get going. He said the Hudson Valley was the only region in the state without an angel investment fund.
“The problem is that before, (startups) would leave to go to New York City or Boston or Silicon Valley because that”™s where they needed to be to get funding, the network and mentorship to take this leap,” LeHane said. “We know a million dollars isn”™t going to change the world necessarily, but it becomes a lightning rod to let people know that the Hudson Valley is a place you can invest and a place investment is happening.”
The group was launched by Tony DiMarco, a founding manager of the fund and a managing director of the Global Center for Social Entrepreneurship Network, with guidance from the Hudson Valley Upstate Venture Association of NY and Eastern New York Angels.
Its other managing partners are Paul Hakim, Chad Gomes and Noa Simons.
Startups have to be based in the Hudson Valley to be considered, which LeHane defines as Westchester, Orange, Putnam, Dutchess, Ulster and Greene counties. The fund is open to pitches from companies across all industries. LeHane said out of the 50 companies the group has screened so far, the main industries have been consumer and business software, food service, agriculture and medical technology.
“It”™s more about what stage they are in,” LeHane said. “Are they far enough along that it is obvious to see they have a concept that has a market?”
The fund plans to hear two, 15-minute pitches from entrepreneurs per month, after which the group will run due diligence research and vote as a board on whether or not to fund the startup. Entrepreneurs can apply through the Hudson Valley Startup Fund page on Gust.com, a website that connects entrepreneurs with accredited angel and startup investors.
The fund is also looking for additional accredited investors at $25,000 per investor.
While LeHane said the group is looking for a return on its investment, it doesn”™t necessarily have ambitions to become a large, multimillion-dollar venture capital fund. Its group of managing partners is more focused on creating a community that fosters growth for startups and small business, LeHane said.
Lehane described growing up near Poughkeepsie in the 1970s and ”™80s, when he said it seemed almost everyone worked for IBM. Then he left for college and he said many of those jobs weren”™t there by the time he returned to the region.
“There hasn”™t really been a diversification of the economy since,” LeHane said. “We”™ve just become a services economy. So for me the end goal is to have an economy that is robust and differentiated and really embraces launching new companies.”
