A Philadelphia-area businessman with a track record in venture capital plans to work over the next few months to launch a new fund with a singular focus.
The focus of what he expects to call the Spirit of Erie Fund, and hopes to grow to $10 million to $15 million, is to invest in early-stage Erie businesses.
The investor is 59-year-old Robert Graham, one of the managing partners of Penn Venture Partners, a venture capital fund that has been doing business in central and northern Pennsylvania.
Graham, who has been doing business in Erie since 2010, said he sees opportunities here for several reasons.
High on that list is that Erie has traditionally suffered from a lack of money to fund early-stage businesses.
Secondly, Graham, who serves on the board of Ignite Erie and invested several years ago in Conduit Technology in Erie, said he’s excited about the growing business activity in Erie.
Graham said he sees activity and business opportunity growing out of Gannon University’s Erie Technology Incubator, the Erie Innovation District and numerous other initiatives taking root in the community.
“I have been working in Erie seven or eight years,” he said. “I think right now there is an amazing amount of opportunity there. There is a lot of upside there.”
Until now there hasn’t been a lot of money invested in Erie startups.
Graham, who purchased an ownership stake in Conduit Technology, a company that was later sold, said that’s one reason he plans to focus his efforts here.
“There is not a whole lot of (investment) money in Erie,” Graham said. “I think there is a lot of opportunity. There is a ton of venture money available in places like Philadelphia and Pittsburgh.”
Another $10 million or $15 million would scarcely be noticed in one of those metropolitan areas, he said. But in Erie, it might make a difference, he said.
The absence of such investors already has likely made a difference — to Erie’s detriment.
“We have had several successful companies start in the Erie Technology Incubator and move out of Erie due to the limited supply of venture capital investors in our region,” said Walter Iwanenko, vice president of academic affairs for Gannon, which operates the incubator.
“These investors are critical with assisting entrepreneurs in taking their companies to the next level following incubation,” Iwanenko said. “Attracting investors to Erie goes hand-in-hand with facilitating start-ups and retaining them in the region.”
Graham said Penn Venture Partners is in the process of being dissolved as he and his partner prepare to go their separate ways.
He plans to set up offices in Erie and hopes to find some Pennsylvania-based investors for the fund, including some from Erie.
“There are always private investors who are looking for new opportunities,” he said.
Karl Sanchack, CEO of the Erie Innovation District, funded by Mercyhurst University, sees Graham’s interest as validation for some of the progress that’s been made over the past year, including the recent completion of the Secure Erie Accelerator, which brought nine high-tech startups to Erie for an accelerator program co-sponsored by Singularity University.
Of those nine companies, none of them local, five have elected to stay in Erie.
“It’s fantastic,” Sanchack said of Graham’s plans to start the Spirit of Erie Fund. “It’s critically important. We couldn’t be happier. The bottom line is there is a general belief that we are on the right track. I expect that over the next two or three months you are a going to hear a lot of things like this that are going to show people are looking to be part of this community in 2019.”
Catherine Mott, the founder of Blue Tree Allied Angels, a Pittsburgh-based angel investment group, said her group withdrew from Erie earlier this year because it wasn’t seeing enough fundable deals.
Mott said Monday she understands things in Erie appear to be changing.
“We felt challenged,” she said. “We could not find enough investment opportunities. I think things are changing.”
Mott, who said she’s familiar with Graham and his work, said she is hopeful about his chances for success.
“I think things are improving,” she said. “I really want to see them succeed. I think what Bob is doing is fantastic.”
This article provided by NewsEdge.