BILLINGS -- Montana rarely registers as a blip on the radar whenever venture capitalists go prospecting for promising upstart businesses.
Will Price of Bozeman is determined to reverse that trend with the launch of Next Frontier Capital, a Montana-based venture capital firm that is raising $20 million to invest in Montana-based companies that have the potential for rapid growth.
Finding access to capital has long been one of the biggest hurdles to Montana business startups, Price said.
“If you look nationally, and at regional comparisons for places like Colorado and Utah, we get very little venture capital allocation in Montana,” Price said. “Our fund is excited to fill that role.”
Price, founder and managing partner of Next Frontier Capital, said the fund is looking to make investments in businesses involved in software, health care and optics and photonics, which is the science of generating, detecting and controlling light. Bozeman has an emerging cluster of businesses involved in optics and photonics. The Montana Photonics Industry Alliance lists more than two dozen members.
Eventually, the fund may broaden its reach into other types of ventures, Price said.
Price said his family has Montana roots: His father was a University of Montana graduate.
Price worked for 15 years in the Bay Area, one of the nation’s entrepreneurial hotbeds, before moving to Montana. His profile on LinkedIn lists his background as a former chief executive and board member of Flite, a cloud-based advertising platform. He was also a managing partner of Hummer Winblad Venture Partners, a venture capital firm that invests exclusively in software companies. He has also been involved in angel investing funds.
Richard Harjes, an investor, scientist and rancher, is a venture partner in the firm. Both partners have experience in investing in and starting technology companies.
Price said the fund seeks to lead or co-lead venture investments in Montana businesses and expects to invest between $200,000 and $1.5 million in any given deal.
The fund may invest in 10 to 12 companies over a period of three to four years.
In addition to providing capital, the fund is committed to “leveraging its network and experience to provide accelerated access to talent, partners, customers and capital.”
Although Montana doesn’t have a long track record of businesses that have received venture capital funding, a few examples include Rivertop Renewables, a Missoula-based firm involved in the chemical industry, Ligocyte Pharmaceuticals of Bozeman and RightNow Technologies, the successful technology firm that was acquired by Oracle.
Price said nearly 60 percent of the investments in the new venture fund are from people who are affiliated with Montana. “They’re either Montana residents or people who fell in love with the state,” he said.
Price said companies seeking investment from the fund will submit their business plans through a Missoula-based tech company named Submittable.
“Once we receive that, we’ll set up meetings and go through the process,” he said.
Price said the fund hopes to make its first investment in July.
“Venture capital is an important ingredient in spurring the start-up and growth of high-technology firms in Montana. There are a lot of very committed people with good ideas in Montana, but they can struggle because historically so much attention gets paid to Silicon Valley and other major, urban tech centers,” said Renee A. Reijo Pera, vice president for research and economic development at MSU. “It’s exciting to see a firm like Will’s in Montana. There is a lot of talent in Montana waiting for venture capital to help it bloom.”
Gov. Steve Bullock and Montana’s two U.S. senators welcomed the announcement.
“With top-notch universities, a tireless work force, incredible public lands, and an unmatched quality of life, Montana is the best place in the country to start a business. Now, with new investments by folks like Next Frontier Capital, more entrepreneurs will have access to the financing they need to grow a successful businesses and create jobs here in Montana,” said Sen. Jon Tester, D-Mont.
“Montanans know that our state is the best place in the country to live, and when our small businesses have the tools and access to capital they need, our state becomes an even better place to work. The investments made by Next Frontier Capital will help spur small business innovation and growth right here in Montana — in turn, creating new good-paying jobs and increasing opportunities for success in Montana’s growing technology sector,” said Sen. Steve Daines, R-Mont.
Bullock expects the fund to meet a crucial need.
“My Main Street Montana Project has identified access to capital as one of the challenges businesses face in Montana. It’s good to see folks across our state working to find solutions to meet that challenge,” Bullock said.
Seth Levine, managing partner of the venture capital firm Foundry Group, said he was glad to invest in the project.
“With his deep roots in the West, and specifically in Montana, and his long history as an investor and executive, Will is the perfect person to build NFC. Having known and worked with him for more than 20 years, I jumped at the opportunity to invest in him and NFC.”