Seattle has become one of the most important top tech hubs in the world, with an all-star lineup of homegrown companies and massive offices for out-of-towners looking to get their hands on the region’s deep roster of tech talent.
But the city that spawned Microsoft, Amazon, Expedia, F5 and Zillow still comes up short in funding sources for early stage companies, with a lack of options for local startups to get off the ground.
In February they began raising money for a new venture capital fund focused on early stage investments called Curious Capital. The fund is based in Seattle, but it wants to invest in startups throughout the Pacific Northwest.
Curious Capital has already cut a couple small checks, and the fund is actively investing. They declined to say what companies they’ve invested in, and did not disclose the target size of the new fund. But the arrival of a new funding source in Seattle is good news for those who’ve argued that the Northwest — despite its amazing array of technologists and world-class companies — still falls short when it comes to bankrolling the next-generation of companies.
The Curious Capital co-founders both hail from Washington state, and recently returned to Seattle from stints in New York and San Francisco. Dumont’s mother fell ill, and that brought him back to Seattle earlier this year, though he had always intended to return some day. Borumand is a born and raised Pacific Northwesterner, who comes from a Microsoft and Boeing family. He felt the pull of home and wanted to get involved in Seattle’s booming tech scene.
The Seattle region has long been critiqued for its general lack of investors, both early-stage angel investors and later-stage venture capitalists. Dumont and Borumand have experienced what they say are stronger funding networks in New York and San Francisco with more options to choose from.
And while there are many angel investors who got rich at places like Microsoft or Amazon and now invest as a hobby, Dumont said that the Pacific Northwest needs more options for early stage startups.
“For an ecosystem to be healthy from a fundraising standpoint, you need more active funds, more active investors supporting it,” says Dumont, adding that they plan to invest across a wide array of sectors, from consumer-oriented companies to business-to-business software. The partners likely will stay away from up-and-coming biotech startups.
Dumont has founded and worked for startups in Seattle, including Moz, where he was business development director. He eventually made his way to New York City, where he worked as an entrepreneur in residence at Betaworks, a startup studio similar in concept to Seattle’s Pioneer Square Labs. Dumont went on to become chief marketing officer at Bitly, a Betaworks spinoff company.
Borumand brings the financial expertise. He is a former investment banker for Vaquero Capital in San Francisco, where he worked on later-stage financing for companies.
One thing you won’t see in these descriptions, a long track record of raising funds.
“We are kind of bootstrapping a venture fund, which is completely illogical; it’s pretty stupid in a lot of ways,” Dumont said. “But we really believe in what we are doing, so that’s why we are doing this.”
That means raising capital is among the biggest challenges.
To overcome this, Dumont and Borumand are starting small, and pitching their expertise as a benefit. They aren’t taking a salary, nor have they attached any fees to the fund. In addition to funding, Curious Capital wants to be hands on with companies it invests in, helping them with growth plans and strategies to bring their products to market.
Curious Capital isn’t the only company to come forward to fill the investor void in Seattle.
Last month, GeekWire reported on a new fund called Flying Fish Venture Partners. Founded by Seattle angel investors Heather Redman, Geoff Harris, and Frank Chang, Flying Fish is focused on helping early-stage startups in the Pacific Northwest get through their Series A round of funding and scale to the next level.
Dumont said he knows his firm won’t entirely fix funding issues in Seattle, but it’s a start.
Curious Capital also wants to be a cheerleader for the region, promoting work done by local startups. Dumont said Pacific Northwest entrepreneurs are much less likely to brag about their work than counterparts in New York or San Francisco.
“I think one of the challenges here — one of the gifts and curses of Seattle people, including myself — is that we put on our headphones and we work, but we don’t boast much. We don’t talk much about what we are doing,” Dumont said. “We are able to build awesome companies here because we are so focused on what we are working on. But it actually hurts because a lot of people don’t know there are a bunch of people building early stage companies here.”