Capital with a cause: Montana VC firm provides $47M in funds to startups

 

From left to right, Tom Stergios, senior vice president of strategy and corporate development at Advanced Technology Group; Andrew Hull, president and founder of Elixer; Luke Mauritsen, CEO of Montana Instruments Corporation; Will Price, managing partner with Next Frontier Capital; and Cynthia Bradford Lencioni, CEO of Pulsara, chat with Rep. Greg Gianforte during a panel discussion at the Montana High Tech Jobs Summit held Monday at the University of Montana. (Missoula Current)

In the years that Next Frontier Capital launched in Montana, it has enabled nine companies in the state to create 81 new jobs with $8.6 million in compensation.

Along the way, it has invested $47 million in capital.

Will Price, a managing partner with Next Frontier, joined a panel of entrepreneurs on Monday at the Montana High Tech Jobs Summit at the University of Montana to discuss the pros and cons of investing in a state-born business.

While starting a business takes risk, Price said, it often takes money, and in the past that hasn’t been easy to find in Montana. The state’s lack of venture capital provided his firm a unique opportunity to make a difference.

“Montana was this great entrepreneurial state that for some reason didn’t attract any capital,” said Price. “I think the reason it didn’t had nothing to do with the quality of the entrepreneurs or the people who are here. It just wasn’t on the radar. But Montana is now being accepted as a credible place to start a business, largely due to its entrepreneurs.”

Next Frontier was founded in 2015 by Price, a former analyst based in San Francisco, and investor Richard Harjes, as a means to fund Montana startups. In 2016, the firm successfully raised $21.5 million as part of its inaugural fund.

The company’s portfolio now claims nine businesses, including Clearas, Orbital Shift and Submittable – each based in Missoula. And while equity is needed to help drive a business to success, Price said, Next Frontier depends upon the entrepreneurs who are willing to take the risk.

“Venture is a service industry in support of entrepreneurs,” Price said. “Without people taking the risk to quit their jobs or start a business, we wouldn’t be in a position to support entrepreneurs. Entrepreneurs are absolutely the key to growing the tech economy.”

The San Francisco area has long been viewed as the hotbed of technology startups, though Price said providing capital to upstart Montana businesses brings its own unique benefits.

The dealings in Montana are based more on relationships than snappy presentations. That, he said, enables his firm to work more closely with those it invests in.

“In Montana, it’s much less transactional and based more on relationships, where you get to know people for long periods of time,” Price said. “It’s not a 45-minute presentation where you’re antagonistically challenging a concept. It’s about identifying the founders you think have that special sense of purpose and passion to overcome challenge.”

Success may also have a greater impact in Montana, he added.

“The marginal impact of an entrepreneur or founder here, it’s massive,” said Price. “Not only are you building your business, you’re helping build a culture of success and possibility, and you can literally see the footprint. There are few markets where you can see that.”