State officials are directing federal funds toward venture capital firms they hope can jumpstart early-stage tech companies in Pennsylvania.
- The firms are Allegheny County-based BTVC Fund I LLP, which is receiving $1.5 million, and Atlanta-based Metallum Ventures LP, which is getting $2.25 million.
- The funding, announced yesterday, comes from the State Small Business Credit Initiative, a federal program that is doling out millions of dollars in Pennsylvania.
- The money is passing through the Ben Franklin Technology Development Authority and the Pennsylvania Department of Community and Economic Development.
What are the firms: BTVC is linked to BlueTree Venture Fund, a Pittsburgh-area investment firm led by general partners and early-stage investors Catherine Mott and Sreekar Gadde.
- Mott is a former chair of the U.S. Angel Capital Association and is an adviser to the U.S. Securities and Exchange Commission.
- Gadde is an attorney with experience in intellectual property law.
- Metallum is a relatively new arm of Bronze Valley Corp., a community development financial institution based in Birmingham, Alabama
- While the organization is based in the Southeast, it has ties to Pennsylvania.
Like what: Bronze Valley principal Anthony Abney is a veteran of the startup scene in Philadelphia.
- In 2019, he founded a company called Gift Diapers, a crowdfunded diaper-delivery service based in the city.
- He worked previously for Ben Franklin Technology Partners of Southeastern Pennsylvania, The Enterprise Center in West Philadelphia and mutual fund giant Vanguard.
- And at least one of Bronze Valley’s portfolio companies is based in the City of Brotherly Love.
- That would be PeopleJoy, an employee benefits business that provides tools to reduce student debt.
What’s the thesis: A term used to describe the investment focus of a venture capital firm.
- BlueTree invests in machine learning, big data and other technologies, with a concentration on startups in the so-called Rust Belt.
- its portfolio includes ERIN, a Pittsburgh-based employee-referral software platform, and Instant Teams, which helps employers connect with military spouses seeking work.
- Bronze Valley has invested in diverse and under-represented entrepreneurs across the U.S.
- Its portfolio includes GRIND, a Houston startup that markets portable shooting machines for amateur basketball players, and Acclinate, an Alabama-based company that educates and engages diverse individuals so they can make informed decisions about genomic research and clinical-trial participation.
The background: Pennsylvania is on track to receive around $268 million through the State Small Business Credit Initiative, a program launched in the wake of the Great Recession of 2008-09 but rebooted for an economy still recovering from the Covid-19 pandemic.
- The federal program has showered funding on economic development agencies across the commonwealth.
- The agencies have created loan funds and other mechanisms to put the money in the hands of small businesses.
- A small portion is going to venture funding for startups, with some of the dollars earmarked for investors that reach diverse and under-represented entrepreneurs.