Galvanize Ventures Closes $10M Seed Fund With Eye to Change Venture

7/14/14Follow @MichaelXBD

The vision behind Galvanize has always been, in the words of its co-founder and CEO Jim Deters, “f—ing audacious.” The latest evidence is the $10.2 million fund raised by Galvanize Ventures to make seed and early stage investments in startups around the country—and, in the eyes of Deters and company, put a new twist on the way venture capital firms partner with entrepreneurs.

The fund, legally known as Galvanize Venture Fund I LP, is a separate entity from Denver-based Galvanize Inc., which recently raised $18 million to turn its gSchool classes for programmers into a full-fledged edtech startup. That money also will be used to build co-working campuses in San Francisco and other cities that are hot beds for tech startups. The classes will be based at the campuses.

But Galvanize Ventures, the campuses, and the school all are part of one vision and, Deters said, will take advantage of their overlapping strengths to carve out a place in the evolving world of venture capital.

“Venture is changing. I think [raising $10.2 million] proves that with our model we came up with an innovative way to approach the venture market. Clearly, as we built more momentum, more awareness of our brand, our reach, it resonated more and more,” Deters said. “It proves that our message is resonating, and what we set out to do is actually working.”

Deters and his fellow Galvanize co-founders and Galvanize Ventures managing directors Chris Onan and Lawrence Mandes have been working on the fund since starting Galvanize in 2012, and as of last week they had made 12 investments. These include investments in Denver-based Cloud Elements, Boston-based Grove Labs, and San Francisco-based Mozio.

But when it came to discussing the details of the fund, the type of investments it would make, and how it fit into the larger Galvanize vision, Deters and company were—somewhat uncharacteristically—tight lipped. Now that the fund has closed, that’s changed.

Like most seed funds—the field is getting pretty crowded these days—Galvanize Ventures’ initial investments in a startup typically will be between $75,000 and $150,000, Onan said, and it will have the cash to invest in later rounds. The fund could invest in 30 to 50 companies, and while it is unlikely to lead many rounds, it could in special cases, he said.

The firm will not focus on a particular type of technology or take a thematic approach built around social or industry trends. That will leave it free to look “super-duper broadly” at companies, Deters said.

Galvanize Ventures will make investments all over the country and already has backed companies in Seattle, Boston, New York City, and Los Angeles.

“The Galvanize model is extensible to any community where there are tech entrepreneurs. The fund serves to look at opportunities wherever great opportunities are,” Onan said.

Given Galvanize’s influence in Colorado and its role in creating a community hub for Denver startups, it’s fair to ask whether the fund would have a Colorado focus. It won’t. That’s nothing against local startups, just a recognition that regionally focused funds have not proven to be successful.

“Geographically restricted funds are just not a good way to allocate capital,” Deters said. “We love this community, … Next Page »

Michael Davidson is the editor of Xconomy Boulder/Denver. He covers startups, venture capital, clean tech, energy, aerospace, telecoms, and whatever else happens above 5,280 feet. Contact him at mdavidson@xconomy.com. Follow @MichaelXBD

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