Spokane Capital Raises $5.8 Million For Second Fund Partnership Hopes To Finance Up To A Dozen Businesses

Spokane Capital Management has raised $5.8 million for investment in growing Northwest companies, Managing Director Tom Simpson said Monday.

Inland Northwest Investors, the limited partnership holding the money, will fund as many as a dozen businesses over the next three years, he said.

“Deal flow is not going to be a problem,” Simpson said, noting he has more than 15 proposals on his desk already.

He said the fund’s objective is an overall return of more than 25 percent per year for investors, about 90 percent of whom are from the Spokane area.

Inland Northwest Investors is the second limited partnership to be administered by Spokane Capital, which was spun off by the Momentum economic development effort in 1993.

Spokane Capital Partners, the first fund, was intended to provide equity funding for companies in the early stages of development. Formation of such a mechanism for venture capital was identified as one of Momentum’s first goals.

Simpson said Spokane Capital Partners was moderately successful, largely on the basis of extremely profitable investments in Eagle Hardware and KAYU-TV, the Fox-TV affiliate in Spokane, Yakima and the Tri-Cities.

He said the $2.9 million fund also did well with investments in Idaho Independent Bank and Mountain West Savings Bank, both of Coeur d’Alene.

The fund continues to have ownership interests in the downtown Holiday Inn Express, the Waterford on South Hill retirement community, Output Technology Inc. and Adatek Inc. in Sandpoint.

Most of those businesses either opened or expanded significantly this decade.

“They did a nice job of investing the money,” said Simpson, who came to Spokane Capital in September after eight years as an investment banker in Seattle.

But he added that Inland Northwest Investors will be managed differently. The focus will be on companies that are already producing revenues, he said.

“They’re more than just a dream,” Simpson said. “This fund absolutely, positively will not invest in startups.”

And the fund can search for deals all over the Northwest, instead of concentrating on the Inland region alone, he said.

Simpson said he will tap his Seattle- and San Francisco-area connections to supplement local resources when a potential deal exceeds what Inland Northwest Investors can safely commit.

“That’s going to be a key part of my strategy,” he said.

The first deal could be completed within the next four months, Simpson said.

, DataTimes