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Sunday, 05 February 2017 16:07

New Lansing seed capital fund to invest in startups

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Tom Stewart, a founding member and managing partner at Common Wealth Enterprises LLC in Lansing Tom Stewart, a founding member and managing partner at Common Wealth Enterprises LLC in Lansing Courtesy Photo

LANSING — A group of Lansing-area investors wants to provide seed capital to one new company annually that’s just getting off the ground.

The dozen partners in Altruis Capital LLC each put a few thousand dollars into the capital fund. They’re now scouting for a startup company that can use seed funding of $20,000 to $30,000 to get started on commercializing an innovation.

Altruis Capital will seek investment prospects from across the state with a focus on the Lansing area, said Tom Stewart, a founding member and managing partner at Common Wealth Enterprises LLC in Lansing.

Partners in the fund don’t have enough to invest individually or to become involved in an angel investment group, so they opted to pool their money in Altruis to support entrepreneurism, Stewart said.

The fund will make a “super early-stage investment to help some of these companies to essentially have experiments,” such as conducting a market analysis to validate an idea or doing beta testing, Stewart said. He cites a need where startups may secure some funding through a local business plan competition, then “falter a little bit, mostly because they could use a little bit of capital and a little push.”

“There is a group of us who are kind of making this stuff happen in our region, so we got together and decided to pull the trigger,” Stewart said. “We formed Altruis Capital to support the upcoming entrepreneurs and help them take their first step toward achieving their dreams.”

The partners may add or subtract from their ranks on an annual basis.

Altruis wants to invest in startups with an innovation to address a “problem in need of a real solution,” although it will look at lifestyle companies as well. The partners are looking for startups with ideas that are scalable, have a simple revenue model, and “a cross-functional team with design, technical, and marketing expertise and a functional prototype or a track record of previous product success.”

Beyond the initial seed capital that would typically come immediately after a startup taps family and friends, Altruis Capital will provide in-kind support. Partners in Altruis include attorneys, accountants and other service professionals who can mentor and assist entrepreneurs.

“We can also tie our network into making this business successful,” Stewart said.

Stewart likens Altruis to a “simpler, lower-key model” of the initial Start Garden structure — it’s since spun off its VC arm into a separate company, Wakestream Ventures — or 5x5 Night in Grand Rapids, although without the option for follow-on funding. One goal for Altruis is to help position a startup for subsequent larger capital investments from angel investors, venture capital or other private capital, he said.

“We are essentially creating a farm league,” Stewart said. “We want to a create a place where more mature VC firms can come and take a look and say, ‘Tell me what you have in your portfolio.’ So we’re creating deal flow for everybody eventually, hopefully.” 

5x5 Night

Read 2808 times Last modified on Monday, 06 February 2017 09:38
Mark Sanchez

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