Fuse Fund restarts capital drive as pandemic inspires entrepreneurs
Fuse Fund is restarting its push to raise $2 million to invest in promising local companies after early pandemic shutdowns forced a slowdown.
The fund is operated by Fuse Advisors, a subsidiary of Richland’s Fuse SPC. Fuse SPC, housed at Richland’s Parkway, is a special purpose company dedicated to providing space, mentors and education to young companies in Benton and Franklin counties.
“We never stood down. But we stopped actively fundraising because of the uncertainty,” said Marty Conger, who retired as chief financial officer for Pacific Northwest National Laboratory and leads the fund’s team of serial entrepreneurs: Brett Spooner, Ron Boninger, David Lippes and Megan Chalk.
It launched in early 2020 and had nearly $1.5 million in commitments prior to the pandemic.
The goal is to provide investment capital in local businesses that have exhausted early-stage capital such as savings and contributions from family and friends.
“Any company that’s going to go big, that’s what we’re looking for. We’re going to be a small investor,” Conger said.
To date, it has invested in Humming Hemp of Richland, Carbitex of Kennewick and Brooks, a Seattle-based firm that is opening an engineering office in the Tri-Cities. A “nexus” with the Tri-Cities is the key.
Fuse set a $2 million fund raising goal, which is well under the $10 million cap for investment vehicles its size. A grant through the Port of Benton paid for legal and other fees to get it off the ground.
It identified both investors interested in placing money in the fund and local businesses in need of cash.
The pandemic slowed its work but did not stop its work.
“I’m really quite pleased with where we’re at given the period we’ve gone through in the past two years,” it said.
Its investments are typically on the smaller side – $150,000 to $200,000 – and are grouped with other investors.
Conger said Fuse has committed about $500,000 to date and called in about 40% of the money investors pledged to its work. It has money to invest. But
$2 million will broaden its reach.
“We still have capacity to make investments,” he said. But more money means more investments.
The minimum to participate in Fuse Fund is a $50,000 investment. The fund is open to accredited investors, meaning those with annual incomes of $200,000 ($300,000 for married couples) and a net worth of $1 million or more.
The Fuse Fund is an eight- to 10-year investment vehicle with the goal of turning a profit to investors while promoting entrepreneurship and job development in the community.
Conger said there’s no shortage of worthy young companies. He said he was surprised by the number of businesses that came to Fuse during the pandemic. It has at least three solid candidates under consideration.
All three of its current investments are in companies that have successfully raised money elsewhere.
Humming Hemp, led by Hilary Kelsay, makes hemp-based health food products such as energy bars, hemp hearts and protein powders. Its products are sold in Kroger stores, including Fred Meyer, and are available on Amazon.
Carbitex, founded by Junus Kahn and led by Rob Langstaff, developed flexible carbon products that are used in high end athletic footwear, including Adidas’s professional soccer cleats, and elsewhere. Ron Boninger, a member of the Fuse leadership team, served as Carbitex’s CEO until he retired in October and brought the investment to the board.
Brook, based in Seattle, is involved with health monitoring technology for chronic conditions. It has a Seattle address but views the Tri-Cities as a place to develop engineering talent. It plans to open a local office with up to five employees, Conger said.
For Conger, it’s time to expand the pool.
“Our sense is that investors who were formally reticent due to the pandemic are again willing to consider investing,” he said.
Contact Marty Conger at email@example.com or online at fuse.fund.
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