In almost every conversation I have with an individual investor, I get asked a question that is almost universally misunderstood. The question is,

“Why does Tundra Angels only invest in Wisconsin?”

It’s a question that is misunderstood on a few levels. At face value, such constraints would appear to limit opportunity.

Yet, we have seen quite the opposite. The focus on investing in Wisconsin actually forces opportunities in a very attractive way. 

One of the best decisions that Tundra Angels made is to laser focus our investment thesis on the state of Wisconsin. 

One aspect of investor deal flow is about discovering startup opportunities that others do not see. Our focus on Wisconsin allows this to happen. 

✅ Importantly, often the best startup investment opportunities don't come looking for the investor.

The investor needs to find them. ✅

I’ll share a story from two weeks ago that was just another example of the power of our Wisconsin thesis, and how this illuminates us to deals that other investors do not see.

Several weeks ago, I attended a startups and VC conference in Milwaukee. About 30 to 50 venture capital firms from around the country attend. It's always an amazing opportunity to reconnect with existing connections and meet new VC investors that we can co-invest with or that can fund our portfolio companies.

I happened to reconnect with a venture capitalist, let’s call him Charlie, from a venture capital firm in Kansas City, Missouri.

Ironically, I met Charlie eight years before this when I myself was a startup founder/CEO. It was after the pitch event through an accelerator program in Little Rock, Arkansas. My bond trading startup was one of 10 other startups pitching our company, and Charlie came up to me after the pitch and we chatted when I was a founder in July 2018.

Fast forward from July 2018 to three weeks ago.

I see Charlie again at this conference. I had not seen him for eight years. But, he tells me, “I’ve been seeing a lot of your stuff on LinkedIn, your activities. Seems like things with Tundra Angels are going well.”

Charlie haven’t communicated for eight years, but he’s following along via social media. And he likes what Tundra Angels is up to.

Keep in mind, this is no longer an investor-to-founder dynamic. This is now an investor-to-investor peer relationship who are interested in sharing deals.

Charlie asks me, “Remind me about Tundra Angels' investment thesis?”

I reply, “We invest in startups in any industry in the state of Wisconsin.”

Charlie replies, “Oh got it. You know, we happen to just have funded a company that is based in Madison.”

Me, super intrigued, perking up my ears, “What’s the name?”

Charlie tells me the company name. I had never heard of it.

Me: “Are they still raising?”

Charlie: “They are actually taking in another tranche of capital at the same valuation.”

Bingo. I ask Charlie to make an intro. A few days later, the intro is made.

Then, I have several conversations with this startup and its co-founders. Turns out the CEO of the company was a former venture capitalist who became a founder and had a stratospheric success. He founded and later exited a company that was valued at over $1 billion - one of the top exits in this particular industry.

During my review, I looked at the capitalization table of this startup. The startu’s previous investors to date included reputable venture firms I was aware of and had spoken to from the startup’s industry that I knew across Indiana, Iowa, Missouri, and Ohio.

No one in Wisconsin. Literally, this is a Madison-based startup and not one Wisconsin investor - VC firm, individual angel, etc.

That’s because, these co-founders had the capital connections in place from their previous venture that they didn’t need to come looking for Tundra Angels.

So, they were only going to be an investment opportunity if they were discovered. And Tundra Angels found them.

Now, lo and behold, this startup is going to pitch the investors at the Tundra Angels pitch meeting next month. The CEO and his Madison-based co-founder are giving Tundra Angels an opportunity to invest in this startup - an amazing opportunity.

But…. let’s go back to how this happened. It’s all because the Wisconsin geographical focus gave Charlie a framing of how to think about relevant opportunities for Tundra Angels.

At one point, one of my investor contacts once told me something that took me aback. Tundra Angels had been around for a number of years by that point.

The investor told me, “When Tundra Angels invests, it means something.” 

Whoa.

I was overjoyed to hear this passing comment. I was super grateful to hear this from this investor friend.

I was also an affirmation of exactly what I am writing about here -

Tundra Angels has engineered for this to be the outcome and pulse of the market by strategic choice because:

Tundra Angels chooses to operate within a surface area of opportunity that we know that we can win at.

It's the simple premise that it's much easier to win in a smaller market. It’s much more achieveable to become an investment firm with an incredible brand in a smaller market, rather than being “just another angel investor network” across a 5-state region.

It’s about being a highly reputable to our co-investor VC firms and angel investor networks, a firm that when they invest, it “means something.”

Back to the question, “Does Tundra Angels only invest in Wisconsin?”

The person asking the question puts forth the question in a light of, “Is that it? Is that the only place you invest?”

The premise behind the question infers that more opportunity is better, so why limit it?

✅ We limit it because often the best startup investment opportunities don't come looking for the investor.

The investor needs to find them. ✅

Investing in Wisconsin helps us see the deals that we actually want to see.

Now, I’m not saying that we’ll never invest outside of Wisconsin. But for now, it’s proving to be one of the core reasons that power the outsized success of our portfolio….

…as long as we keep finding.

See you next Wednesday.

-Matthew

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