Doubling Down on Success Investing in Trailblazers
Minneapolis – May 23, 2022 – Early-stage VC firm Great North Ventures announced today it has closed $40 million for its second venture fund (“Fund II”). The fund aims to continue the firm’s success investing in startups from Seed to Series A stages. New investments will address three key themes: digital transformation through AI, community-driven applications, and solving labor problems.
Founded and operated by successful founders, Great North Ventures focuses on providing capital, connections, and operational guidance to startups. Its new Fund II has added a Venture Studio, whereby new startups are co-created and supported from ideation through launch and beyond. The fund’s investing and support are network-driven, with connection density in Minnesota, through the Upper Midwest, and extending beyond.
Founders seeking funding can apply for immediate consideration.
“We have refined our approach as a network-driven investor with Fund II. Our Innovator Network has depth and breadth across startups and Fortune 500 companies. Our team’s network is diverse and rooted in our own experience as founders. It is densest in Minnesota and the Upper Midwest, and extends beyond. Our deal flow and support and consequently, our capital deployment, align with this density, By playing to our network’s strengths in this way, we maximize investment potential, while also creating a blueprint for further Fund growth in locations that are undercapitalized.”- Ryan Weber, Founder & Managing Partner
“Great North Ventures has a strong track record. Our investors have given us a vote of confidence by coming out strong for Fund II, with a 70% increase in fund size, and we are grateful for their continued support as well as the support of new investors. Our strategy as a thematic, network-driven investor focusing on opportunities in underserved markets is resonating and we see this successful Fund II raise as proof of this theme and our ability to execute.”- Rob Weber, Founder & Managing Partner
Fund II Strategy and Themes
Great North invests in domains with substantial unsolved problems that can be solved by entrepreneurs leveraging technology. The firm’s Innovator Network is a network of former founders, skilled operators, and successful investors that have a track record of execution. It is a key resource for helping with sourcing opportunities, diligence, strategy insights, referrals for team additions, and mentorship for the core team.
One of the key strategies of Great North Fund II is its Venture Studio, in which it designs and builds companies with world-class founders in focused market segments with substantial opportunities. In the venture studio model, problems that startups could solve are identified, markets are evaluated, teams are built, MVPs (minimum viable products) are spun up, and experiments are run to iterate products until product/market fit is achieved.
Startups co-created in the Great North’s Venture Studio continue to receive fundraising support and board oversight after they launch. NextGem is a tool and social network for trading card enthusiasts to better manage and discover great cards. It is the first company created in Great North’s Venture Studio. The second startup to come out of the studio is Backhouse Brands, a self-serve marketplace for creating and managing virtual restaurant brands.
Three investment themes drive Great North Ventures Fund II:
• Digital Transformation Through AI – Great North is looking for technology-driven startups that are innovating traditional industries using artificial intelligence. Its portfolio examples across Fund I and II include Allergy Amulet, Coverlease, DispatchFlywheel, Inhabitr, and Nested Knowledge.
• Community-Driven Applications – Great North is looking for consumer or enterprise startups that are connecting people through software, especially in the areas of media consumption or commerce. Its portfolio examples include NextGem, Omnia Fishing, and PartySlate.
• Solving Labor Problems – Great North is looking for startups with market-driven solutions for workplaces and labor. Its portfolio examples include FactoryFix, Skillit, and Yardstik
Founders who fit one or more of these themes and are raising a Series Seed through Series A round may apply for funding on this web page.
Fund I History
The firm was originally known as Great North Labs when it was founded in 2017. Its first fund of approximately $24 million was one of the largest debut venture funds raised in the Midwest and now includes a portfolio of 27 investments, six of which have exited. New investments from Fund I are now complete, with the remaining capital reserved for follow-on investments.
Strong growth has continued across Great North’s Fund I portfolio. Aggregate revenue run rate of these companies increased 294% from the time of initial investment through the end of 2021. Recently, several of Great North Fund I portfolio companies have announced new growth rounds including Dispatch, Branch, and FactoryFix.
Great North Ventures’ co-founders, Robert and Ryan Weber, are twin brothers with a successful track record since the early 2000s as founders and angel investors. They were joined in founding the firm by a former mentor, Pradip Madan, who is a successful technology executive and investor. Rounding out the team are Venture Partner Mike Schulte, and Director of Marketing Josef Siebert.
About Great North Ventures
Great North Ventures is an early-stage VC firm located in Minneapolis. The firm has raised two funds since its 2017 founding. As a network-driven, early-stage investor, the firm has deep roots and density in the “capital desert” outside Silicon Valley, New York, and Boston.
Built by founders, for founders, the team is experienced in founding and scaling tech companies. Its team consists of ex-operators with significant experience across stages of growth from startup to public companies and M&A, and broad and deep technical, sales, marketing, and transactional expertise. Great North prioritizes execution over strategy and pedigree when choosing companies and founders to back. Fund II will invest in startups that fit three themes: Digital Transformation through AI, Community-Driven Applications, and Solving Labor Problems.
Intro to Great North Ventures
Great North Ventures is an early-stage VC located in Minneapolis and St. Cloud, MN. Our investment team consists of ex-operators with significant experience across stages of growth from startup to public companies and M&A, and broad and deep technical, sales, marketing, and transactional expertise. Starting in 2017, we have raised two funds.
Fund I, from which we made new investments from 2017-21, focused on opportunities arising in the Upper Midwest given the strength of the entrepreneurs, and the relative lack of venture capital. Our focus on the Upper Midwest allowed us to leverage the substantial network our founders have in the region, as well as the operating experience of all the partners across sectors and geographies.
Fund II Thesis
For Fund II, we have narrowed our investing themes, as well as expanded our lens with respect to geographic focus. Roughly, we aim to invest 1/3rd of our Fund in Minnesota, 1/3rd in the Upper Midwest, and the remainder without a geographic constraint. This enables us to continue to address the undercapitalization as well as take advantage of our deal flow momentum in the Upper Midwest. For another 1/3rd of our capital, as we have built relationships beyond the Upper Midwest, we want to take advantage of the deal flow for the best opportunities. Our allocation of the remaining 1/3rd further enriches our deal flow, as all regions in the US and elsewhere have concentrations of expertise, and the greater geographic diversity enables us to find the best deals in our target domains.
Fund II Investment Themes
We invest along three themes, Digital Transformation Through AI, Solving Labor Problems, and Community-Driven Applications.
Digital Transformation Through AI – The next dominant wave of technology-driven innovation will occur in legacy industries. We invest in the tools and technology that use AI to solve pervasive problems in legacy industries.
Solving Labor Problems – The world’s talent markets are more competitive than ever, and the hardest challenges for virtually every business are related to attracting and retaining talent. Across all industries, we focus on investing in startups that tackle talent issues like recruitment, development, and retention.
Community-Driven Applications – Network-driven software is expanding into every industry, spreading beyond consumer to enterprise. These applications feature lower customer acquisition costs and higher retention rates, driven by strong viral effects that make use of growth loops. We invest in these startups that can kickstart networks.
As an early-stage fund, we seek opportunities from inception through evidence of product market fit.
Our investment criteria are foremost the size and potential of the opportunity. initial evidence of adoption or early product-market fit (e.g., registration growth, time spent using the service), low cost of customer acquisition, high lifetime value/customer, stickiness, sales motion simplicity, team strength, defensibility, and capital efficiency. We invest in domains where there are substantial unsolved problems that can be solved with entrepreneurship, and where we have strong expertise. Supplementing our own strengths, our network of advisors is a key resource for us in helping with diligence, key strategy insights, referrals for team additions, mentorship for the core team, etc.
For opportunities at inception, we substantially rely on our venture studio. Our strategy for the venture studio is to create startups where we have unique expertise and where we do not see attractive opportunities based on external deal flow. We have incubated two opportunities to date in our venture studio.