Investor group expands fund for Sonoma-Marin startups to $6.6 million

A Marin County investment group Tuesday revealed its progress toward expanding access to funding for local startups.

Marin Sonoma Impact Ventures, based in Corte Madera, said its first effort, MSIV Fund I, has raised over $6.6 million from more than five dozen investors in its 2½-year effort to take a new approach to venture funding for the North Bay.

Fund founder and Managing Partner Zachary Kushel said Tuesday that when he determines which companies are invested in he will at times tap into recommendations from seven advisers and 42 executives who volunteer with his group. The hope is for the venture capital fund, launched in April 2020, to be distributed among 10 to 15 entrepreneurs “wanting to build high growth opportunities on a national and international scale.”

No specific industry is targeted. He said the aim is for those selected under contract to reach a liquidity level (meaning the conversion of assets into cash) after 7- to 10 years. The fund management will receive management fees, among other undisclosed proceeds from each business, he said.

He said the investment is earmarked for entrepreneurs based in Marin and Sonoma counties. That way, the growing companies will employ local workers, thus propping up the regional job market that — as trends go — appears more local from home to work.

“For the first time in our community’s history, there is now pooled capital and professional management with an obligation to deploy that capital into Marin (and) Sonoma’s most promising young enterprises,” he stated. “This is a critical demarcation point for the economic future of this community, and I’m so excited for all that is ahead as we work to grow innovation and job creation north of the Golden Gate Bridge.”

The startup investment group formed in April 2020 and debuted two months later in a virtual event. The group is a for-profit business with a social mandate and started with 30 local entrepreneurs as investors.

At the time, Kushel said the fund had invested in Novi, a Larkspur-based technology platform for the consumer packaged goods sector; Finalis, an investment banking firm based in Corte Madera; and New Retirement, a financial planning technology solution in Mill Valley.

In the announcement Tuesday, Santa Rosa’s Operant Networks was revealed as the fourth firm the fund is backing.

All four startup companies received more than $300,000 each.

Operant Networks CEO Keith Rose said he plans to use the money for sales and marketing efforts. The company, which moved on Dec. 15 from Santa Rosa to Rohnert Park on Valley House Drive, assists renewable energy company with cybersecurity software.

“These companies are becoming a real part of the electric grid,” he said.

MSIV Fund I is intended for early-stage venture capital investments in companies that plan to grow and create jobs locally. The goal is to invest in 15 local startups over three years, the group said.

Among the group’s 62 investors is Tom Isaak, of Petaluma, who is founder and chairperson of CourseCo Inc., a management company for about 40 golf courses in the western U.S.

"Like so many North Bay natives, post-college when it came time to find a career, I had to hit the road,” Isaak said in the announcement. “When I ultimately came home to start a company, I would have benefited greatly from a strong local entrepreneurial community. MSIV is filling that void, and I'm excited there is now a vehicle where community leaders can invest in our best and brightest citizens poised to be the next generation of local job creators.”

Other investors identified were Jake Walker, a San-Rafael-based attorney; and Mill Valley’s Paul Solli, co-founder of Sausalito-based Aperio Group, now part of BlackRock. The amounts each has contributed was not disclosed.

The group said it has spawned related groups like the North Bay Founder Network, with over 130 founders or CEOs of Marin and Sonoma startups, and MSIV Executive Network, a group of 42 local C-level executives who are working as mentors to other North Bay entrepreneurs.

Editor’s note: This story was updated to clarify how the investment fund management selects recipients and to provide more specifics about its contracts.

North Bay Business Journal staff writer Susan Wood contributed to this story.

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