Matchstick Ventures Closes $55M Fund
Matchstick Ventures on Tuesday announced the close of its third fund focused on pre-seed and seed-stage technology startups with a connection to the North or Rockies. At $55 million, Fund III is the Twin Cities and Colorado-based investment group’s largest to date, and a sign, said partner Ryan Broshar, of the growing interest in startups based in the center of the country.
“There are great companies everywhere. We are truly seeing more national interest in our market and big-time coastal capital funds wanting to be part of the deals we seed, wanting to invest in the founders coming out of our region. That wasn’t the case with our first fund. It was more of us having to sell to them,” said Broshar, who started Matchstick six years ago with Natty Zola, a fellow founder-turned-investor. The two worked together on the Techstars accelerator program in Boulder, Colo.; Broshar then brought the program to the Twin Cities.
Now they plan to apply that same spirit of mentorship and support to their investment portfolio companies through a new program called Matchstick Strikers. It’s a way of formalizing their investment beyond dollars, Broshar said—helping startups with everything from workforce development to sales training and improving diversity and sustainability.
“Our customers are the founders,” Broshar says. “We’re constantly trying to find ways to add value. This is a way of formalizing something that’s always been core to our thesis.”
Matchstick isn’t the only venture fund sounding more and more like a startup incubator program. Among its fellow Twin Cities-based VC funds, Bread & Butter Ventures prides itself on providing its portfolio companies with “corporate connections, commercial opportunities, and industry expertise.” Groove Capital routinely makes connections for its founders while also offering workshops to help would-be investors—particularly women and BIPOC individuals—get more familiar with the VC opportunity.
Last year, in the wake of George Floyd’s murder, Matchstick set specific goals to increase representation of people of color in its portfolio and communities. The investment group has met some of its benchmarks and continues to work on others, Broshar said. Fifty-four percent of companies in its last fund are led by at least one underrepresented founder: 31 percent female; 37 percent non-white; 14 percent Black. Matchstick also counts 31 percent of its portfolio companies as “impact companies,” intent on generating a measurable, beneficial social or environmental impact alongside financial returns.”
Matchstick plans to write checks between $500,000 and $1.5 million from its new fund. To date, the firm has invested in more than 100 companies including Twin Cities-based startups Soona, Inspectorio, Branch, Fiveable, and Parallax.
Prior to Matchstick, Broshar, co-founded Beta, the startup support organization that produces Twin Cities Startup Week, which kicks off on Friday. “I’m always on the lookout to meet with new startups,” said Broshar, who plans to attend or participate in several in-person events. TCSW was born of a need for founders and investors to connect, and after taking TCSW virtual last year due to Covid-19, Broshar said he feels that same need once again. “Many of our investments have come from bumping into somebody at an event. In-person events allow that to happen more serendipitously. It’s been a long time.”
Ryan Broshar talks about the Twin Cities startup community and investing on By All Means podcast