There are many banks serving early-stage companies, but most outside of a few specialist lenders, like Silicon Valley Bank, limit their financing to debt rather than equity. Wintrust decided in 2015 to see how equity investing would work alongside conventional debt offerings, and so far CEO Edward Wehmer likes what he sees.
“It’s been a good run for us,” he says in an interview. “Two losses for every one big winner.”
He declines to say what the gain is for Wintrust Ventures overall.
Winners have included The Mom Project, which matches employers with new mothers recently departed from the corporate workforce who are looking for part-time work; Cohesion, a software firm serving office landlords; and Foxtrot, a specialty provider of beer, wine, snacks and prepared foods.
Now a $50 billion-asset bank, Wintrust was less than half that size when it launched its venture-capital arm. Senior Vice President Bailey Moore, who launched the unit at age 28, remains head of Wintrust Ventures. It was an unusual tack for a commercial bank that, like most such business lenders, focused on established businesses that were profitable.
At the time, it was viewed as something of an experiment. The test clearly has been passed.
Wehmer expects this new round of $50 million will be allocated more rapidly than the first round. “We’ll be replenishing all the time, too,” he says, as investments are liquidated.
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