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Red Cedar launches seed fund to invest in Cedar Valley startups

February 6, 2019

Red Cedar, a startup catalyst made up of entrepreneurs, private businesses, colleges, cities and economic development partners, recently launched a new seed fund.

Titled the Red Cedar Seed Fund, the strategic fund focuses on high-potential, early-stage companies in the Cedar Valley.

As of the beginning of 2019, the seed fund has invested in two early-stage startups—Terraoak and STRATAFOLIO.

The Seed Fund plans to invest a total of $200,000 per year over the next three years, spread among five to eight local early-stage startups. The investment amount for each company will vary based on the startup’s needs and plans for the funds, and the fund is still open to bringing on additional investors.

Danny Laudick, Executive Director of Red Cedar, explains that the seed fund is far more than just startup capital.

“The Seed Fund provides companies with a connection to a group of experienced, serial entrepreneurs who can provide advice, support and connections,” Laudick said in the announcement of the fund. “Our goal is to help these companies grow, and capital is just one of the components to help with that journey.”

The Seed Fund is currently made up of a group of nine investors, eight from the local community and one from Des Moines, all with strong local ties to the Cedar Valley. Investors are from a variety of industries and represent both individual investors as well as local businesses.

Tags: Red Cedar Seed Fund

Red Cedar launches seed fund to invest in Cedar Valley startups | Clay & Milk

A central Iowa ag-tech accelerator has secured more backers and finally has a name. The Greater Des Moines Partnership first announced the accelerator last year, naming four initial investors. On Monday, the Partnership said the program will be called the "Iowa AgriTech Accelerator" and named three new investors. The new investors include Grinnell Mutual, Kent Corp. and Sukup Manufacturing, all Iowa companies. They join investors Deere & Co., Peoples Co., Farmers Mutual Hail Insurance Co. and DuPont Pioneer. Each investor has agreed to put up $100,000 for the first year of the accelerator. Startups entering the program will receive $40,000 in seed funding in exchange for 6 percent equity. Tej Dhawan, an angel investor and local startup mentor, is serving as interim director until the AgriTech Accelerator names a permanent leader. Dhawan held a similar role with the GIA before Brian Hemesath was named as managing director. As interim director, Dhawan said his main job includes hiring the accelerator's executive director, establishing a business structure and initial recruiting for the first cohort. The accelerator will place few filters, such as location and product, on the applicant pool, Dhawan said. "When you’re seeking innovation, innovation can come from every corner of the world so why restrict ourselves," he said. One area the the AgriTech Accelerator won't recruit from is biotech. For its first cohort, the AgriTech Accelerator will work out of the GIA's space in Des Moines' East Village, Dhawan said. A future, permanent home is still to be decided. The accelerator's program will host startups from mid-July through mid-October, ending with an event connected to the annual World Food Prize. The GIA, which the AgriTech Accelerator is based on, also ends with presentations at an industry event. The accelerator has also started lining up a mentor pool. The Iowa Corn Growers Association, Iowa Soybean Association and the Iowa Pork Producers Association have agreed to provide mentors, as has Iowa State University. While the AgriTech Accelerator is loosely based off of the GIA, it will differ in its business structure, Dhawan said. The GIA runs through a for-profit model for both operations and its investment fund. The AgriTech Accelerator will have a nonprofit model for its operations and a for-profit setup for its fund. Dhawan said the nonprofit model is being used so the accelerator can better work with other nonprofit partners, such as trade associations. "These are all organizations that are nonprofits and can be amazing stakeholders without ever having to be investors in the accelerator," he said. "It becomes easier to work with trade associations in their nonprofit role when we are also a nonprofit." When it's up and running, the AgriTech Accelerator would be one of a handful of ag-focused startup development programs in Iowa. Others include the Ag Startup Engine out of Iowa State University and the Rural Ventures Alliance from Iowa MicroLoan. Matthew Patane is the managing editor and co-founder of Clay & Milk. Send him an email at mpatane@clayandmilk.com.

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