ImpactAlpha, January 7 – By global standards, American startups’ access to capital is good. U.S.-based businesses take in half of all venture capital funding worldwide. But national figures obscure regional realities: only about 5% of U.S. venture investments flow to startups in the Southeast and Midwest, according to PitchBook’s data.
Park City, Utah, and Kansas City, Mo.-based Royal Street Ventures targets such overlooked regions. “We’re kids from the middle of the country and love building the ecosystem we came from,” the firm writes.
Royal Street has raised $16.4 million for startups “between the coasts.” Its third fund will make investments of up to $1 million in investment rounds as large as $5 million.
Royal Street’s investment thesis emphasizes building entrepreneurial ecosystems in underfunded areas, but it doesn’t call itself an impact investor. The Rise of the Rest fund, which closed its $150 million second fund in October, invests with a similar thesis (see Steve Case’s post, “How Rise of the Rest will have impact — and why it’s not an impact fund”).
Impact in the portfolio
Royal Street’s portfolio of 40 companies includes a number of social impact startups, like female-founded Acivilate, which helps companies measure their social impact; Apostrophe Health, which facilitates health insurance for self-insured employers; local and organic food companies Allgood Provisions and Farm Hand; and solar financing company Wunder Capital (see, “Wunder Capital sells loans to free $200 million for solar financing”).