A new venture capital fund called Mastercraft Ventures is launching in Beloit with a $2.4 million investment from the state’s Badger Fund of Funds.
This marks the sixth VC fund to have the Badger Fund as its lead investor and the first in Rock County, according to a release from Mastercraft. The fund manager, Mason Cook, previously led software company RealityBLU in Beloit.
“I’ve always focused on taking career roles and finding experiences that I would love to see in an investor for my own company,” he told WisBusiness.com in a recent interview. “You know, somebody who’s run their own business, they’ve raised funding and they’ve worked in the trenches of a startup. And I don’t think many investors understand the startup journey from both sides of the table.”
Through Mastercraft Ventures, Cook aims to be in the first round of funding for Wisconsin-based startups, with an overall goal of driving economic development at the community level while delivering returns for investors. He expects to start investing by this summer and plans to back 10 to 12 startups over the coming years through the fund.
“Our investment strategy is to write the first $400,000 to $500,000 check size into Wisconsin-based startups,” he said. “We’re reserving a meaningful portion of the fund for follow-on funding, and subsequent rounds, we expect a startup to need to raise two to three, maybe four rounds of funding before exiting.”
While the fund will be investing across the state, it will have a “particular focus” on southern Wisconsin. He says the region already has strengths in advanced manufacturing, health technology, logistics and agriculture, also pointing to the impact of Microsoft’s planned $3.3 billion investment in the state’s southern region.
Cook notes the company has committed to train thousands of Wisconsinites in AI over the next five years, adding this creates “a huge opportunity” for startups in the state.
“We’re already a leader in those industries that I mentioned, but with Microsoft’s unique investment, I think there’s an opportunity for Wisconsin to become a leader in artificial intelligence as well,” he said.
He also emphasized the opportunity presented by the Badger Fund support, noting the state will match 40 cents to every 60 cents raised after the first $2.4 million, capped at $5 million.
Because Mastercraft Ventures will be leading funding rounds, it will be setting the terms of funding, Cook said, pointing to a “gap in the ecosystem” for startups raising their first round and seeking a lead investor.
“The number one reason that startups fail is they run out of money,” he said. “A startup will typically need to raise multiple rounds of funding before they exit … a large part of what I’ve done before is build a large network of regional investors. And so I’m excited to use that network to help startups we invest in raise additional rounds of funding.”
The VC fund plans to register with the Wisconsin Economic Development Corp. to get qualified venture fund certification, according to the announcement, providing tax benefits for eligible investors in the fund when it invests in Wisconsin startups that are recognized as qualified new business ventures.
See the release.
