Washington, D.C., has an emerging startup scene, but most of its entrepreneurs still struggle to raise investment from local firms.
Grotech Ventures is one of the leading venture capital firms funneling money into the region. Today, the Vienna-based firm announced the close of its eighth fund at $225 million. It brings GroTech’s total capital under management to $1.3 billion.
“We give money to people who have shown they can do a lot with a little and can make things happen,” said Grotech General Partner Don Rainey in an interview. “We are looking for responsible leaders and capable people. It is more impressive to have a guy or gal come in that is taking $20,000 and made something material happen than the guy or gal who needs a million dollars to prove anything.
Grotech makes early stage investments in “underserved” markets along the East Coast and in Colorado. The investment strategy is to put in a small amount of capital early on and continue to invest in a company over time. Areas of interest include digital media; social, mobile and cloud computing; enterprise and infrastructure software; security technologies; consumer internet and e-commerce; and energy and health care IT. Portfolio companies include LivingSocial, HelloWallet, Booker, Invincea, Personal, and recently acquired NextGen Storage.
Washington, D.C., is home to an enormous amount of talent, and traditionally the bulk of that talent goes to work for big government contractors, consulting firms, or the public sector. The notion of “entrepreneurship as a way to save America” is gaining momentum in the nation’s capital and coworking spaces, tech events, and accelerator programs are becoming more common. This excitement does not necessarily extend into to venture capital and the investor community in the region tends to be more risk-averse and conservative.
Grotech has already made twelve investments from the new fund.
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