Solidus, Co-Founders launch JumpStart Foundry for seed-stage investing
By Milt Capps Updated 9:42 p.m.
Solidus Company and nearly 20 co-founders have launched JumpStart Foundry LP, which will invest $15,000 in an array of individual seed-stage ventures.Solidus Partner Vic Gatto told VNC this morning he expects JumpStart to make total investments in the $140,000 to $200,000 range during the coming year, making one investment decision per month for the forseeable future.
In addition to Gatto and Solidus Founder and President Townes Duncan, the JumpStart Foundry lists as co-founders Germain Böer, Vanderbilt Owen Graduate School of Management; Tod Fetherling, Nashville Technology Council; Pinky Gonzales, entrepreneur, formerly with Echomusic; Marcus Whitney, of MoonToast and Remarkable Wit; Jeff Cornwall, Belmont University; and, others whom Gatto declined to identify today.
Böer and Cornwall are participating as observers, only, and are not investors, due to potential conflicts of interest when their students seek JumpStart funding.
Gatto said each co-founder who is also an investor is a "small limited partner," with investments of $1,000 or more augmenting Solidus' own $120,000 upfront investment.
In a Solidus release issued this afternoon, Duncan explained JumpStart will make impact locally because, “Traditional venture capital funds require investments to be at least $1-5 million in size. This amount of capital is often much more than an entrepreneur can effectively utilize at the very early-stage of concept development. Over the last few months, Solidus has assembled 18 experienced, successful entrepreneurs who want to solve this early-stage funding gap and share Solidus’ passion for helping promising start-ups. Together, this founding group set out to craft a new way to provide support, both financial and operational, to innovative and promising entrepreneurs.”
In the same release, founding member Scott Kozicki, a tech entrepreneur, said, in part, “the JumpStart Foundry name is meant to be symbolic of our two-fold mission. The fund intends to help launch...emerging new business concepts...JumpStart Foundry will also establish partnerships with local organizations to offer important business services at either free or dramatically reduced pricing for the fund’s investments...”
JumpStart Foundry is, itself, now a Solidus portfolio company. Gatto said Solidus and the co-founders are sharing equally in the carried interest, or long-term gain, derived from JumpStart.
Gatto said one JumpStart investment has already been made in an iPhone application startup, but he said details on that deal will be released, soon.
He said that the founders' collective networks and companies spotted amid Solidus' deal-flow produced 15 first-round seed-stage companies as entrants in the February review. Investment decisions will be made by "consensus" by the co-founders, he explained.
Entrepreneurs, Gatto said, will typically get their proposal in the JumpStart pipeline by completing an application form on the fund's website, yet to be launched at JumpStartFoundry.com. Fewer than a half-dozen questions will be posed online to entrepreneurs.
Gatto said JumpStart aims to leverage companies that are still "more conceptual" and "have no real traction, yet," but which can get to the proof-of-concept stage of development, with a relatively small amount of cash.
Gatto and Duncan are not only principals in Solidus, which has about $55 million under management, but are also pushing for funding for a TNInvestco-certified company they founded in 2009, Solidus-TNInvestco LLC.
Germain Böer, director of the Vanderbilt Entrepreneur Center, told VNC this morning the Foundry "is a great idea. My view," he explained, " is that the more stuff we have happening in Nashville that encourages entrepreneurship, the better."
Böer said he believes it is less important whether a given initiative is "well-funded or just a grassroots effort – anything we do is always making us better-off, in my view."
Böer said he will serve with the Foundry only as an observer, rather than investor, because if he were an investor he would have a conflict of interest when encouraging his Owen Graduate School of Management students to apply for Foundry funding, as he indicated he is likely to do.
Nashville Capital Network Executive Director Sid Chambless told VNC this morning he knows too little about the project at this point, but added, "Based on the little I know, it sounds like a great program for seed-stage entrepreneurs in Nashville."
Gatto earlier told VNC he had reviewed the initiative with Chambless, and Gatto has hinted at Solidus micro-fund plans for months, often alluding to the concept during appearances as a panelist in public venture-oriented meetings.
Angel Capital Group President Rachael Qualls has not yet responded to a VNC request for comment. ♦