Minnesota Fund Raises $16.6M to Foster Midwest Entrepreneurs

Entrepreneurs / 16th April 2021

Traction Capital has closed Focus Fund I at a final fund size of $16,605,000. Traction Capital is a Minnesota based hybrid private equity and venture capital firm with a mission of helping entrepreneurs in the Midwest get what they want for the greater good. The fund closed on March 5th, 2021 with 76 total investors including over 50 Minnesotan Entrepreneurs.

Shane Erickson, the Founder and Managing Partner of Traction Capital, first had the vision for the fund while acting as an Angel Investor and mentor of several Minnesota-based companies that had significant exits. In each successful exit, Erickson assisted the company with key hires and the implementation of processes that helped stimulate growth.

Minnesota and the Upper Midwest are areas of huge opportunity but can be overlooked by the coastal investment firms. We can’t wait to unlock the massive potential that we believe entrepreneurs in our region possess,” says Erickson.

Erickson sees the hybrid model as offering significant upside to Traction Capital’s investors while mitigating some of the downside risk typically associated with traditional venture capital funds. The acquisition component allows Focus Fund I to construct a portfolio that includes a mix of early-stage investments with high potential for growth along with more mature acquisitions.

“Raising a fund during a pandemic came with its fair share of challenges. I think this economic uncertainty led to many investors pivoting and seeking opportunities within Focus Fund I. It’s encouraging to see the investor base we were able to gather because I think it speaks volumes to our belief in Minnesota and its early-stage businesses and the opportunity for a great return in the long-term,” says Erickson.

Erickson is joined at Traction Capital by President Brian CoxJoe Morris (VP of Investments and Acquisitions), and Peyton Green (Lead Analyst).

Traction Capital is further supported by its Advisory Committee including Barb StinnettMatt MeentsWade BurgessAndrew Duneman and Jeff Fritz.

Focus Fund I will look to complete three to four investments and one acquisition in 2021. Investment opportunities that are early-stage, post-revenue, and have market-leadership potential are considered. Acquisitions include established businesses with a key employee in place to run the company post-transaction. The team has identified several potential investments and has an existing pipeline of deals in various stages of review.  Learn more about Traction Capital and its investment thesis at www.tractioncapital.com, or by contacting Peyton Green at peyton@tractioncapital.com.

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