A New Investment Fund Seeks to Spur Vermont’s Startups

Source: Seven Days

Private equity investor Jim Crook and four associates have launched an investment fund aimed at injecting $12.5 million into promising startup businesses in Vermont.

Announced this week, the Dudley Fund will focus on early and mid-stage Vermont companies that need an initial infusion of about $50,000 to $150,000 in order to grow. The goal is to find and fund entrepreneurs who have demonstrated that they can create jobs and inject money into the state’s economy.

“This is for companies that are going to create a significant economic impact, that will create jobs here, pay taxes here, support other local businesses here and generate wealth,” Crook said. “That is our most important objective.”

In return for their investment, backers will get a small share in the company — as long as it succeeds. If it goes out of business, their money goes with it.

Crook spent 25 years as an executive at IDX Systems, the South Burlington company that was sold to GE Healthcare in 2006 for $1.2 billion. Since then, he has operated a private equity firm called JH Capital that has invested in several Vermont businesses, including DealerPolicy Insurance of Williston, Greensea Systems in Richmond and Beta Technologies, the fast-growing electric aviation company based at Burlington International Airport.

Crook’s founding partners in the Dudley Fund — a separate undertaking — include his daughter, Allison Maino, who runs operations for JH Capital; executive director John Antonucci, the former director of LaunchVT; financial consultant Cherian Philip, with whom Crook worked as an investor at Aspenti Health, a Burlington health care company that was sold last May; and Tom Moody, a director at Downs Rachlin Martin and a longtime Crook associate.

In preparation for the Dudley Fund’s debut, the founders last year raised $250,000 from each of about 50 partners, all but two of them in Vermont. Another 25 people who aren’t investors will serve as mentors or advisers for the companies that Dudley is investing in.

“In Vermont, there were some early stage companies where people that had good ideas couldn’t get them off the ground because they couldn’t get their first $100,000 of capital to get the ball moving in the right direction,” Crook said. The Dudley Fund will follow up with more money if the company succeeds, he said.

About 70 percent of the fund’s money will go to early stage companies, Antonucci said, and the rest to more established businesses. Board roles will rotate through the 75 people who are involved in the fund, he said. To start, Crook and Moody make up the board.

Read more here.

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