Bozeman venture capital firm eyes Missoula for growth, investment opportunities
An upstart venture capital firm based in Bozeman has hired a Missoula partner to help grow the organization’s membership base, positioning it to fund the state’s emerging businesses.
But unlike other VC firms seeking opportunities for high returns, Homestake Partners is focused on what its founders see as the state’s “backbone” businesses, be it the local hardware store or the new corner market.
“The idea is there’s a lot of businesses out there that are good growth candidates – the businesses that form the backbone of our communities,” Homestake co-founder Bill Stoddart said Thursday. “Here in Bozeman, and I know in Missoula as well, there’s this whole cohort of businesses that fit that description. We’re saying these are great businesses that deserve access to capital.”
While Homestake traces its roots back to 2010, Stoddart pins its actual launch date to 2016. It recently named Andy Gordon, formerly of Clearas Water Recovery in Missoula, as its outreach coordinator.
Stoddart described Homestake as a “deconstructive” VC fund, one that’s looking for homegrown opportunities. While many Montana businesses are poised for growth, he said, some don’t have the collateral needed to secure bank funding, or can’t provide the high returns needed to attract investment from other venture capitalists.
Having Montanans invest in Montana companies, he added, keeps money in the state and helps grow the state’s overall economy.
“We get to invest in Montana businesses, and the investment dollars are coming from Montanans,” said Stoddart. “We’re not exporting capital to the coasts, which I think is one of our fundamental problems as a capitalistic system – that wealth continues to concentrate in certain areas of the country and in certain people’s pockets.”
Homestake currently claims around 40 members. As subscribers, they gain access to the firm’s industry research and marketing. Members of the group then choose which companies to invest in based upon their own unique interests.
Stoddart said the firm’s current membership is capable of providing more than $20 million in financing throughout the state, though it has identified nearly $50 million in opportunity. By hiring Gordon in Missoula, it hopes to expand its membership base to achieve a greater level of investment.
“When we look at our immediate pipeline, we’ve got about $5 million worth of deals just about ready to see if people want to help finance them,” Stoddart said. “We’ve got another $5 million in the wings, and if we talk about some of these bigger opportunities that we’ve been in conversations with, it puts us at the $50 million mark pretty easily, so long as we build enough membership.”
The firm’s portfolio includes a number of Montana businesses, including Gallatin Valley Botanical – an organic farm – and Wisetail – a corporate e-learning company. It also includes Sofi, the Natural Baby Company, and Sola Cafe & Market, located in Bozeman and Big Sky.
Stoddart said the firm currently has its eyes on Reflex Protect in Missoula.
“Our fundamental thesis is that we need to have a more distributed way of recognizing opportunity,” he said. “We need to finance that opportunity and ultimately help those companies achieve success. We also need to provide an avenue for local people to participate in the success of those businesses, as it is mutually beneficial.”