There are many changes ahead for SpringTime Ventures while it looks set to deploy its newly closed second fund.
First, the Denver-based company is moving away from its original focus on its home state of Colorado, despite being the only local fund in two of the state’s 10 unicorn companies. It is also now able to expand its team thanks to three times the money for Fund II, giving SpringTime enough cash available to finally pay its partners a real salary.
So far, these changes have proved positive. SpringTime announces a second $25 million fund to reduce checks from $400,000 to $600,000 for US-based seed-stage software companies. The fund was raised from an LP base of 120 entities largely made up of high net worth individuals.
With this latest fund, Matt Blomstedt and Rich Maloy, SpringTime’s managing partners, can give up their consulting work to focus on investing full-time, and get paid for it, overcoming a financial hurdle that plagues many budding fund managers but isn’t. is spoken about often. The company was also able to add a principal and two partners.
The new pool of capital will be invested in startups in sectors such as fintech, insurtech, healthcare, logistics and supply chain. While Fund I was largely deployed in companies in the same industries, Fund II’s thesis represents a departure from what the company first focused on: filling a funding gap for startups in Colorado.
Blomstedt told londonbusinessblog.com that he originally got the idea for SpringTime after moving to Colorado in 2015 after a career in the energy sector in Texas. He started attending happy hours to get to know people in his new community and met a bunch of startup founders who all shared the same problem. Blomstedt saw an opportunity.
“At the time, there just wasn’t a dedicated startup fund in Colorado and the consistent theme was: [local founders] had to go to the coast or maybe to Austin, Texas or Chicago to raise seed capital,” Blomstedt said. “I was starting to get pretty convinced of an opportunity and the need for a startup fund in Colorado.”
He decided to raise a proof-of-concept fund to support these startups. The first fund was a struggle to raise, he said. He collected $8 million, which the company invested in 35 companies, including future Colorado unicorns SonderMind (telehealth) and Veho (logistics).
While the fund doesn’t stick to its original premise of backing companies in the Centennial State, Blomstedt said most of their existing portfolio companies would fall under this new strategy anyway. The above two examples support that. In addition, he believes this distinction will help them make better use of their LP network: 77% of Fund I LPs have returned for the new approach.
“They drive deal flow or they help us evaluate deals, so we kind of started to feel attracted to those industries,” Blomstedt said. “It also just made us better; this focus and this network around us allows us to make faster and more responsible decisions in a much shorter time.”
He added that they can add value to the company’s portfolio companies later on. For the same reason, SpringTime has also attracted a handful of operational partners for Fund II. Now, after raising two very different market conditions — Blomstedt said it took about the same time to raise the first $22 million and the last few million — it’s time to implement.