Firm Revives Plan For New Venture Fund Spokane Capital Sets Stage To Resurrect Offering This Fall

A Spokane firm that last year postponed creation of a new $5 million venture capital fund will resurrect the offering this fall when a new managing director comes on board, officials said Tuesday.

Spokane Capital Management Corp., a privately held company that has $3.5 million invested in area businesses, will begin raising an additional $5 million to create a second venture capital fund.

The fund could help expansion of existing businesses, or the launching of new businesses by entrepreneurs who struggle to secure bank financing because of a lack of experience or low net worth. A venture capital fund often takes greater risk than a bank, placing more emphasis on potential for success and less on financial strength.

Spokane Capital last year began raising support for its second fund, but returned the money when former managing director William Wright resigned. Wright left in December to devote attention to his Subway sandwich franchises, said Spokane Capital Chairman David Clack.

The decision to revive the second fund coincides with the hiring of Thomas Simpson, the current investment banking director for Dain Bosworth Inc. in Seattle. Simpson, a Spokane native, will become managing director of Spokane Capital on Sept. 1, Clack said.

“We decided to terminate the fund, regroup, hire a new managing director and then crank up later,” Clack said. “We hope to have it (new fund) up and running before the end of the year.”

Investors had pledged more than $3 million to the second fund last year before it was postponed. The fund was expected to broaden its scope of investments beyond the Spokane and North Idaho area, a strategy that Clack said will continue when the new fund is launched.

Simpson returns to Spokane to direct one of the few venture capital firms in the Inland Northwest. Spokane Capital in the past has put money into Eagle Hardware & Garden in Tukwila, Wash.; Adatek Inc. in Sandpoint; The Waterford retirement center on the South Hill; and Buffalo Inc., a Spokane apparel maker.

Simpson has considerable credentials for the job.

A graduate of the University of Washington, he went on to become a certified public accountant and earn a masters of business administration from the University of Pennsylvania’s Wharton School of Business.

Spokane Capital was formed in 1988 by Momentum, a Spokane-based economic development group. Spokane Capital became independent in 1993.

, DataTimes