As Bruce Springsteen sings in his 1984 hit Dancing in the Dark, “you can’t start a fire without a spark.” And for HappyValley entrepreneurs and startups, State College-based 1855 Capital has been that spark to attract investors and raise much-needed capital in the competitive venture landscape.
The 1855 Capital Fund is a $12 million seed and early-stage venture capital fund investing in companies with a connection to Penn State University. 1855 Capital develops investment opportunities by actively engaging with the Penn State network to identify research projects, students, alumni or others in the Penn State community who are pursuing breakthrough ideas that have the potential for venture-level returns. And while the Fund has strong ties to the Penn State community and its sprawling alumni base around the globe, 1855 Capital is a privately owned and operated company led by Managing Director Matt Rhodes, a 1979 graduate of Penn State’s Eberly College of Science (Rhodes’ impressive professional background ranges from start-up funding and management to leading a $1 billion semiconductor business). Under his leadership, 1855 Capital is looking to help businesses and give early-stage ideas a way to grow.
“We have a lot of innovation here in Central Pennsylvania and good ideas happen everywhere,” Rhodes said. “If we can show investors that those transformative ideas are happening here and can be developed here in State College, there will be more infrastructure, more funding and more venture funds. And that would be [a] success.”
“If we can show investors that those transformative ideas are happening here and can be developed here in State College, there will be more infrastructure, more funding and more venture funds. And that would be [a] success.”
A Marquee Example: Phospholutions Attracts $10.3 Million in Venture Capital Funding
According to Crunchbase, one of the leading destinations for company insights from early-stage startups to the Fortune 1000, venture capital investment grew by 76.7% in Pennsylvania between 2016 and 2020. There was over $1.7 billion in venture capital investment in Pennsylvania in 2020.
While 1855 Capital is a smaller fund on the grand scale, it still makes a big impact in Happy Valley. Rhodes spoke glowingly about the many Happy Valley-area innovators and Penn State entrepreneurs that 1855 Capital has assisted.
“Right now, we have a few startup companies operating locally that would not have found funding without the assistance provided by 1855 Capital,” Rhodes said. “We are a very small fund – $12 million – so we are not going to move the Pennsylvania economic needle, but we can be successful. We are going to attract other funds into the region – and that I consider a success.”
One of the major success stories is that of Phospholutions – founded by 2016 Penn State graduate Hunter Swisher. Phospholutions, Inc. is a sustainable fertilizer start-up based in State College whose signature technology, RhizoSorb® is a soil amendment or fertilizer additive used to efficiently deliver phosphorus and other nutrients to crops.
"venture capital investment grew by 76.7% in Pennsylvania between 2016 and 2020. There was over $1.7 billion in venture capital investment in Pennsylvania in 2020"...
“There are lots of success stories in the Penn State community that 1855 Capital has been helpful with, but Phospholutions is the marquee example,” Rhodes added. “I followed their work initially through the Happy Valley LaunchBox and then two years into that process we engaged with Hunter to help raise capital funding. They started with a $250,000 check and just recently raised $10.3 million in venture capital funding from a syndicate that includes some of the most respected AgTech investors in the world.”
“Our Story is One of Location — Location Matters”
1855 Capital is always looking for great ideas and startups to work with, but its main area of focus is companies specializing in information technology, advanced materials, FinTech, EdTech and healthcare and medical devices.
The team at 1855 Capital always wants to hear about exceptional ideas, and, to help startups meet their potential, 1855 Capital helps them in leveraging the expertise, resources and support of Penn State University and its 19 Commonwealth campuses; Ben Franklin Technology Partners; their network of limited partners; and over 700,000 Penn State alums.
“We are literally the only active venture fund operating in central Pennsylvania exclusively. Our story is one of location – location matters,” Rhodes said. “We are here to help you think through how to make your idea bigger to attract venture capital. We are looking for you to have an idea that is transformative because that is what attracts venture money.”
For a business to benefit from the capital and expertise available through 1855 Capital, it should have an identifiable core technological competency; the potential to compete effectively in the marketplace; a business model and management team that are both scalable; a well-articulated business plan that delivers a value-increasing milestone on $100K to $500K investment; and quality cross-functional teams who are agile and committed to long-term success.
If you think your company is the right fit, you can contact 1855 Capital at (814) 826-4740 or by email at firstname.lastname@example.org