HONOLULU — The Hawaii Strategic Development Corporation (HSDC) today announced the State of Hawaii’s $4.5 million commitment to Startup Capital Ventures II, a Hawaii- and California-based fund that will provide investment capital to help Hawaii technology companies scale.
This investment marks a significant milestone for the HI Growth Initiative, the state’s core initiative to drive economic growth by investing in Hawaii’s entrepreneurial ecosystem.
“The goal of the HI Growth Initiative is to build a continuum of financing for all phases of business development, from startup, to expansion, to growth,” said Lt. Gov. Shan Tsutsui, who spearheads the initiative. “The successful closing of the Startup Capital Ventures II fund establishes this continuum.”
The HI Growth Initiative, administered by HSDC, has already invested in Honolulu-based venture accelerator, Blue Startups, which provides pre-seed capital to startups, and Maui-based investment fund, mbloom Fund I, which provides expansion capital. These funds together with the University of Hawaii research commercialization fund, UPSIDE Fund II, create a pipeline of companies for prospective investments by Startup Capital Ventures.
“Startup Capital Ventures’ presence in Hawaii opens the door for other Mainland investors to consider investments here as they have an on-the-ground partner to help watch over their investments,” said DBEDT Director Richard Lim. “Whereas Hawaii companies were once at a geographic disadvantage, Startup Capital Ventures is closing this gap and making investments here attractive for other investors.”
HSDC President Karl Fooks noted that the investment in the Startup Capital Ventures comprises both state and federal funds through the HI Growth Initiative and U.S. Department of the Treasury’s State Small Business Credit Initiative (SSBCI), respectively.
“I applaud Hawaii on its ability to deploy SSBCI funds in a manner that promotes the growth of small businesses and spurs transformational economic growth,” said Clifton Kellogg, director of SSBCI, which allocated $13.1 million to HSDC toward a venture capital fund of funds investment program.
With the investment in Startup Capital Ventures II, HSDC has obligated $11 million of its SSBCI allocation.
The fund is managed by serial entrepreneur, investor, and part-time Honolulu resident Tim Dick whose
investments include match.com (acquired IAC), WorldPages (NYSE:WPZ then acquired BT) and SilverTail (acquired EMC), along with California-based 25-year venture capital veteran Tom Toy whose investments include SunPower (NASDAQ: SPWR), CafePress (NASDAQ: PRSS) and UTStarcom (NASDAQ: UTSI). Other investors in the fund include Hawaii, Mainland and international institutional investors.
General Partner Tim Dick stated: “Startup Capital is pleased to welcome HSDC as an investment partner. We have a proven Hawaii investment track record and look forward to more investments going forward.”
In his 2013 State of the State Address, Gov. Neil Abercrombie announced the HI Growth Initiative as a state investment program focused on building an innovation ecosystem that supports entrepreneurial high growth businesses and creates high wage jobs for our people. On July 9, 2013, Lt. Gov. Shan Tsutsui, as acting governor, signed Act 274 (House Bill 858), appropriating funds to the Hawaii Strategic Development Corporation for the HI Growth Initiative.