‘HI Growth Initiative’ Establishes Financing Pipeline for Hawaii’s Tech Industry

Posted on May 29, 2014 in News

Hawaii Strategic Development Corporation
For Immediate Release: May 29, 2014

HONOLULU—The Hawaii Strategic Development Corporation (HSDC) today announced the State of Hawaii’s $4.5 million commitment to Startup Capital Ventures II, a Hawaii- and California-based fund that will provide investment capital to help Hawaii technology companies scale.

This investment marks a significant milestone for the HI Growth Initiative, the state’s core initiative to drive economic growth by investing in Hawaii’s entrepreneurial ecosystem.

“The goal of the HI Growth Initiative is to build a continuum of financing for all phases of business development, from startup, to expansion, to growth,” said Lt. Gov. Shan Tsutsui, who spearheads the initiative. “The successful closing of the Startup Capital Ventures II fund establishes this continuum.”

The HI Growth Initiative, administered by HSDC, has already invested in Honolulu-based venture accelerator, Blue Startups, which provides pre-seed capital to startups, and Maui-based investment fund, mbloom Fund I, which provides expansion capital. These funds together with the University of Hawaii research commercialization fund, UPSIDE Fund II, create a pipeline of companies for prospective investments by Startup Capital Ventures.

“Startup Capital Ventures’ presence in Hawaii opens the door for other Mainland investors to consider investments here as they have an on-the-ground partner to help watch over their investments,” said DBEDT Director Richard Lim. “Whereas Hawaii companies were once at a geographic disadvantage, Startup Capital Ventures is closing this gap and making investments here attractive for other investors.”

HSDC President Karl Fooks noted that the investment in the Startup Capital Ventures comprises both state and federal funds through the HI Growth Initiative and U.S. Department of the Treasury’s State Small Business Credit Initiative (SSBCI), respectively.

“I applaud Hawaii on its ability to deploy SSBCI funds in a manner that promotes the growth of small businesses and spurs transformational economic growth,” said Clifton Kellogg, director of SSBCI, which allocated $13.1 million to HSDC toward a venture capital fund of funds investment program.

With the investment in Startup Capital Ventures II, HSDC has obligated $11 million of its SSBCI allocation.

The fund is managed by serial entrepreneur, investor, and part-time Honolulu resident Tim Dick whose
investments include match.com (acquired IAC), WorldPages (NYSE:WPZ then acquired BT) and SilverTail (acquired EMC), along with California-based 25-year venture capital veteran Tom Toy whose investments include SunPower (NASDAQ: SPWR), CafePress (NASDAQ: PRSS) and UTStarcom (NASDAQ: UTSI). Other investors in the fund include Hawaii, Mainland and international institutional investors.

General Partner Tim Dick stated: “Startup Capital is pleased to welcome HSDC as an investment partner. We have a proven Hawaii investment track record and look forward to more investments going forward.”

In his 2013 State of the State Address, Gov. Neil Abercrombie announced the HI Growth Initiative as a state investment program focused on building an innovation ecosystem that supports entrepreneurial high growth businesses and creates high wage jobs for our people. On July 9, 2013, Lt. Gov. Shan Tsutsui, as acting governor, signed Act 274 (House Bill 858), appropriating funds to the Hawaii Strategic Development Corporation for the HI Growth Initiative.

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Media Contact:
Dave Young
Information Specialist
Phone: (808) 586-2480

Caroline Julian-Freitas
Director of Communications
(808) 586-0292
ltgov.hawaii.gov

 

About the HI Growth Initiative
The HI Growth Initiative is a state initiative administered by the Hawaii Strategic Development Corporation (HSDC) that supports the development of entrepreneurial businesses in the knowledge-intensive and creative industries by mobilizing and attracting entrepreneurial talent and private capital to these high-growth sectors. For more information, please visit hsdc.hawaii.gov/hi-growth-initiative.

About the State Small Business Credit Initiative
The SSBCI is a Federal program administered by the Department of the Treasury (Treasury), which was funded with $1.5 billion to strengthen state programs that support private financing to small businesses and small manufacturers. In conjunction with leveraged private financing, the SSBCI is expected to help spur up to $15 billion in lending to small businesses and manufacturers that are not getting the loans or investments they need to expand and create jobs. The SSBCI allows states, territories and eligible municipalities the opportunity to build upon or create successful models for state small business programs, including Capital Access Programs (CAPs), and Other Credit Support Programs (OCSPs) such as collateral support programs, loan participation programs, loan guarantee programs, and venture capital programs. For more information, please visit www.treasury.gov/smallbusiness.

About Startup Capital Ventures
Startup Capital Ventures is an early stage venture capital firm with offices in Menlo Park, CA, and Honolulu, HI. SCV was founded in 2005 and focuses on investments in early stage, capital efficient, IT companies, generally in Silicon Valley, Hawaii and Midwest. The firm takes active roles with its portfolio companies, frequently playing the role of lead investor and sitting on the companies’ boards of directors. SCV held a first closing on its second fund in May 2014. For more information, please visit www.startupcv.com or contact info@startupcv.com.