Statewide Venture Fund Makes First Investments

Four months after taking the field, a statewide venture fund is taking its first shots.

• The so-called GO PA Fund has invested in two companies, a financial technology firm based in Swarthmore and an advertising tech company based in New York, albeit with roots and some operations in Philadelphia.
• The fintech company is LoanStar Technologies, which helps banks and credit unions make point-of-sale loans through local retailers.
• The adtech company is Audigent, whose platform helps advertisers target consumers without the use of cookies, an online technology being phased out under regulatory pressure.
• The fund is investing $2 million in each, according to Scott Nissenbaum, president and CEO of Ben Franklin Technology Partners of Southeastern Pennsylvania, one of the fund’s investors.
• Other backers include Ben Franklin entities serving the rest of the state, Lancaster-based Fulton Bank and Wilmington, Delaware-based WSFS Bank.

What’s the fund: A venture fund launched last fall with a goal of investing in some of the more than 600 startups funded statewide by Ben Franklin entities, including Ben Franklin Technology Partners of Central and Northern Pennsylvania.

• Known formally as the Global Opportunity Pennsylvania Fund II, the fund has raised $40 million to date, after debuting last fall at $28 million.
• It builds on the results of a five-year-old fund focused on the Philadelphia area, called GO Philly, Nissenbaum said.
• But it also builds on the long-standing relationships that the Ben Franklin entities have with the businesses they back.
• “We’re typically investing in these companies for five or six years, so we know these businesses really well,” said Aston Pierce, who was hired this year as investment director for the GO PA Fund.
• He is currently forging relationships with companies backed by Ben Franklin entities across Pennsylvania.
• “That is the key,” said Pierce, who worked previously for Princeton, New Jersey-based Edison Ventures. “You want to have a relationship with the CEOs, you want to be able to fund them when they hit that inflection point of growth.”

What’s the need: To funnel investment into growing Pennsylvania startups and, ideally, keep them based here.

• The Ben Franklins typically invest in a company’s early stages, Nissenbaum said. “But typically, the biggest windfalls, the biggest financial returns are for the venture capitalists that invest in these businesses, on average, six years after Ben Franklin makes its first investment.”
• And sometimes, those later investors convince PA-based companies to relocate as part of the package, he said, citing the example of health technology company Accolade.
• It moved from Philadelphia to Seattle, where it proceeded to create 700 jobs.
• “That story occurs all too often,” Nissenbaum said.

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