In a significant boost to the venture capital landscape of Central Pennsylvania, the region is set to benefit from the establishment of the Keystone Innovation Fund II, thanks to a generous grant of $412,598 from the US Economic Development Administration’s ‘Build to Scale Capital Challenge.’ This transformative grant will support the creation of a robust venture capital fund that combines the management of two existing entities, State College-based 1855 Capital and York-based White Rose Ventures, solidifying venture capital management capacity for the region into the future.
Combining Forces for Growth
The consolidation of the management teams of 1855 Capital and White Rose Ventures will strengthen the capacity to raise and deploy venture capital and enhance capital support for regional technology companies. Over the past several years, both 1855 Capital and White Rose Ventures collaborated closely with the Ben Franklin Technology Partners of Central and Northern Pennsylvania (BFTP-CNP), co-investing and providing crucial follow-on capital to its portfolio companies. This collaboration over the years established the relationships necessary to make the current combination possible.
Matt Rhodes, Managing Partner, 1855 Capital, shares his enthusiasm for this development. “We are thrilled to take this major step forward partnering with White Rose Ventures to create the Keystone Innovation Fund II and a lasting venture capital institution in Central PA. I have seen first-hand the strong investment opportunities in rural Pennsylvania from not just the outstanding Ben Franklin and Penn State network but also the burgeoning ecosystems in every corner of the Commonwealth.”
Fostering New Relationships
The Keystone Innovation Fund II will also utilize the grant to forge new relationships with Corporate Venture Capital and Family Offices, recognized as robust seed-stage investors. This strategic move aims to broaden the scope of syndicate investment partners for the Fund, further contributing to the growth of the region’s technology investment ecosystem.
“This collaboration is a key milestone for innovation throughout Pennsylvania,” said Martin Fedorko, Managing Partner, White Rose Ventures. “Together with 1855 Capital, and with the support of the EDA, we are well-positioned to accelerate growth and economic development across the entire Commonwealth.”
Empowering Future Leaders
A noteworthy aspect of the initiative is the establishment of a venture capital intern program. This program is designed to expose women, minorities, and rural business students to the intricacies of venture capital finance, fostering diversity and inclusivity within the industry.
Steve Brawley, CEO of Ben Franklin Technology Partners of Central and Northern Pennsylvania emphasizes the strategic vision behind the initiative: “At BFTP-CNP, it has always been a strategic priority to support and construct, when necessary, more risk capital infrastructure for regional technology companies. This grant and the collaboration between 1855 Capital and White Rose Ventures are critical steps in creating a lasting venture capital institution in our region, benefiting current and future generations of local tech entrepreneurs.”
The Keystone Innovation Fund II, fueled by the EDA grant and the collaborative efforts of 1855 Capital, White Rose Ventures, and BFTP-CNP, marks a pivotal moment in the development of Central Pennsylvania’s innovation ecosystem. As these entities join forces, the region is poised to enjoy the long-term benefits of job creation, higher wages, and enhanced global economic competitiveness, affirming the importance of fostering a healthy innovation ecosystem.
