[T]wo venture capitalists from Chittenden County say they have pulled together $50 million to invest in small, socially minded businesses that are seeking to grow.
Their names are Robert Zulkoski, 56, and Frank Koster, 59. Their venture is called Vermont Works, and they say they started the fund in order to contribute to their home state.
Vermont Works calls itself the only professionally managed fund with a “double bottom line”: The companies it invests in must be profitable while having a socially minded cause.
The $50 million they’re investing comes from themselves and third parties. So far, they have committed investments to Vermont Farm Table in Bristol, Stonecutter Spirits in Middlebury, and BTV Ignite and ThinkMD in Burlington.
“We’ve been involved in the area of social impact investing globally for several years, and now we want to be able to focus those efforts here in Vermont where we call home and we expect to call home for the rest of our lives,” Zulkoski said.
“Our activities will span across the entire state and will include looking at opportunities in … towns around the state who are engaging in businesses and services that benefit everyday Vermonters,” Zulkoski said.
Vermont Farm Table, which turns forest products into custom tables, has a mission to bring people together, according to Vermont Works. ThinkMD was started by employees at the University of Vermont Medical Center and is creating a mobile app to allow nonprofit organizations to go to remote countries and diagnose people right on the ground.
In addition to being socially minded, those businesses are all in what Zulkoski calls a growth stage. They have secured enough startup capital to become a business, and they’re seeking larger amounts of cash to be able to get to the next level.
“When companies are out for growth-stage capital, that’s when the availability of capital in Vermont tends to stumble,” Zulkoski said. When growth-stage businesses are able to find money, it often comes from an out-of-state investor, who may demand the company move out of state, he said.
Sas Stewart and Sivan Cotel, the co-owners of Stonecutter Spirits in Middlebury, said the three-year-old company is in its third phase of raising capital. The first was to use their own money; the second was to get loans from local sources; the third is bringing on investors.
“(Vermont Works investors are) one of a small handful of people who have invested in Stonecutter,” Stewart said. “Because we weren’t raising huge amounts of money right now, we were able to really make sure the people that were coming in on the round were people who were kind of like-minded individuals.”
Cotel said Zulkoski and Koster related well to the owners when they met to discuss investing, and are not “the kind of investors who want to pressure you to (answer), ‘What’s the plan of how you’re going to sell the company in five years?’”
“They were much more about long-term pacing, and I really think that’s core to one thing we liked about them, but also core to how we’re approaching things,” Cotel said.
(Correction: An earlier version of this story misspelled Robert Zulkoski’s name and had his age wrong.)
