Accelerators Cincinnati Cintrifuse Funds Techstars Techstars Ventures

Cintrifuse Invests In Techstars New $150M Fund

Way back in 2013, I had the chance to attend the Everywhere Else Cincinnati. Without editorializing too much, I was thoroughly impressed with startup/small business ecosystem that was developing. I was impressed more with the scope and aims of said community than anything else. Don’t get me wrong, there were/are great resources and economic incentives available to startups in Cincinnati, but you can get those in just about any large city. What really struck me about Cincinnati was the focus on the community itself. There are a lot of startup communities all over the U.S., and the World for that matter, that make grandiose claims about progress and the betterment of society. The Cincinnati community let’s their work do the speaking.

In 2004, one of the main drivers of Cincinnati’s revitalization – 3CDC (Cincinnati Center City Development Corporation) – began to pour what would amount to well over $700m into revitalizing the city’s Over the Rhine (OTR) district. Prior to these investments, and even well into the cycle, the OTR district was one of if not the most economically depressed inner city regions in the whole country. This was the spark that really ignited the whole community. Since this initial investment, Cincinnati has become a major innovation hot spot.1 Within Cincinnati, a few major players have emerged. One of these players – Cintrifuse – has just made some pretty big news.

cintrifuse Cintrifuse Invests In Techstars New $150M Fund

Cintrifuse’s new office space, slated to open this Summer

 

Cintrifuse is a sort-of dual-role entity. First and foremost, the Cintrifuse acts as startup advocacy group, positioning itself as the hub of Cincinnati’s entrepreneurial ecosystem. Secondly, Cintrifuse operates a large fund, the Fund of Funds. While it may sound a bit illogical, this fund is used to invest other funds outside of Cincinnati, for the benefit of Cincinnati (emphasis added):

The Cintrifuse Early Stage Capital Fund I, LLC, a venture capital fund of funds, invests in regional and national early-stage venture capital funds outside of Cincinnati – generating outside investment and interest and increasing the investable capital available to Cincinnati startups to over $500MM…There is no requirement that funds invest in the region, but they must have a regional plan that includes activity and engagement with our limited partners (LPs) and startups.  Currently, for every $1 invested, $5.50 is returned to the region via investments from the venture network.2

As part of this strategy, Cintrifuse announced on Tuesday that they would be investing in Techstars latest fund. 3 This new Techstars fund, which will total somewhere around $150 million when closed, will be used primarily to provide seed and series A rounds. While the fund won’t be used directly in the Techstars accelerator, it will be used to, “co-invest alongside venture capital and angel communities in Techstars accelerator program graduates, new companies started by Techstars alumni, and companies formed by Techstars mentors.”4

 

It is not as if Techstars is just taking money from anyone, either. David Cohen, the co-founder of Techstars (pictured above), said as much in a statement about the deal:

When we look towards expanding our reach, we look for the most favorable startup ecosystems in the country. Ecosystems with the right talent, the right mentors, and the right mentality…Cincinnati has large, high-caliber corporations and a thriving startup community so partnering with Cintrifuse will just continue to bolster the region’s flourishing startup ecosystem. I’m already a big fan of #StartupCincy!5

  1. I wrote a pretty long piece on the growth of Cincinnati over on TechFaster if you are interested.  
  2. Cintrifuse, “Fund of Funds”  
  3. That’s a buried lede if I’ve ever seen one.  
  4. Eric Weissmann, Cintrifuse Blog, “CINTRIFUSE FUND INVESTS IN TECHSTARS VENTURES,” 17 February 2015  
  5. Eric Weissmann, Cintrifuse Blog, “CINTRIFUSE FUND INVESTS IN TECHSTARS VENTURES,” 17 February 2015