Kansas City, Mo. – A new venture capital firm comprised of seasoned investors from Kansas City is filling an underserved need in the local startup ecosystem. Target Hill Capital launched in January and is focused on early-stage funding for entrepreneurial companies past the “friends and family” stage (typically $50-100K) but not yet ready for seed funding ($1M+).
For investors, Target Hill offers both VC holdings as well as high-quality, income-producing multi-family real estate assets to mitigate risk and balance its portfolio. The approach reduces the volatility of early-stage venture investing without sacrificing its benefits. The existing portfolio is on track to achieve a 12 percent cash-on-cash return for 2018.
“We’re interested in companies with products or services that are ready to fill a need in the market,” said Marshall Dougherty, one of the Target Hill partners. “We recognize that many companies have financial demands at that earlier stage. We want to partner with these companies to position them for success and ensure they achieve the next seed round.”
Because the majority of funding in the region is concentrated in the seed to growth capital stages, Dougherty said Target Hill has an opportunity to not only fill a gap in the VC landscape but also help construct scalable growth companies and investment opportunities.
The company provides funding in the $250-500K range and provides key benefits to entrepreneurs, including expedited funding and a hands-on approach. In addition, Target Hill works with the business owners to implement best practices for operations, finance and customer acquisition to help ensure success. The company works primarily with technology startups who have an existing product and that have identified a market with significant growth potential. Each prospective portfolio company must also undergo a rigorous due diligence process, with only about 5 percent of companies receiving funding.
Target Hill was founded by Jim Ferree, a former NASA designer and owner of J&A Industries. After selling the company to private equity, Ferree briefly retired before recognizing the opportunity in the venture capital ecosystem in Kansas City.
“While you can find some VC firms in this space on the coasts, it’s virtually non-existent in the Midwest,” he said. “We’re excited for the opportunity to help innovative and successful entrepreneurs realize their goals.”
Brendon Barker, a practicing attorney for the past 18 years, is an additional partner at Target Hill. The company was named for the field used as a shooting target for West Point cadets in the 19th century.
To encourage growth in the local region, Target Hill also requires its portfolio companies to have a presence in Kansas City if they’re not already located here. The current portfolio includes the following companies:
- Digital Baron – A powerful text-to-order and payment tech platform using standard smartphone capabilities that targets the fast-food and quick-service restaurant markets.
- PlanIT Impact – A software tool that calculates and analyzes the impact energy, water, stormwater and transportation design decisions have on building performance and efficiency.
- Blipd – A location-based augmented reality mobile app development company. Blipd allows users to create, share, discover and connect with the important people and places around you.
- Tweedl – A mobile app created by the former CFO for Sean “Diddy” Combs that connects aspiring music artists with music lovers everywhere, empowering users to select the next hot artists and boost their influence as tastemakers in music.
- Novel Growth Partners – A flexible capital firm working to improve access to capital for companies in underserved markets.
- Vesta Realty LLC – A boutique, privately held real estate investment firm that focuses on the acquisition and management of opportunistic and value-add multifamily properties (through which Target Hill invested in Jenk’s Best Living LLC and Bixby’s Best Living LLC).
About Target Hill Capital
Founded in January 2018, Target Hill Capital is a venture capital firm that aspires to be the true cornerstone of Kansas City’s functioning startup ecosystem—joining the right resources with the right network with the best and brightest tech startups. The company’s sharpened focus allows them to fearlessly weed out the wild guesses from the insider’s secrets to launch the next generation of innovators using the perfect mix of science and art. Learn more at www.targethillcapital.com.