Build Ventures, the regional venture capital fund, is beginning to prepare for its second fund now that it has just over a year to complete the portfolio of its first fund.

The Halifax-based firm launched in 2013 with a $65-million fund, raised from the four Atlantic Provinces, BDC Capital and private investors. Partners Rob Barbara and Patrick Keefe planned to spend five years investing money from their first fund, and then hoped to raise a second fund.

However, Keefe said in an interview that they have started the process to raise the second fund.

“Raising capital is very difficult and a very long road so we need to begin the process well in advance of that date.”

[Full disclosure: Build Ventures is a client of Entrevestor.]

The firm’s website lists a portfolio of 10 companies in its first fund. It has closed funding deals with the 11th and 12th portfolio companies though they have not been announced, and is now in negotiations with its 13th.

By the end of March 2018, it will not bring any new companies into the first fund’s portfolio, though it will have cash on hand to join follow-on rounds for its portfolio companies.

Three Reasons Scaling Beats Launching

What Build Ventures brings to the Atlantic Canadian startup ecosystem is the ability to invest more than $1 million at a time in growing companies.

Most of the other funding bodies in the region tend to make investments of $100,000 to $900,000.

Build, by contrasts, invests in chunks of $1.5 million to $2 million, a funding level that is needed to fuel the larger startups in the region.

“If we haven’t raised a second fund by (late March 2018), the role we play in this ecosystem will be on hold for a while,” said Barbara.

Right now, the partners are pleased with the overall performance of their portfolio, as three of the companies have received follow-on funding since Build invested in them.

Halifax-based Affinio and two Fredericton companies, Resson and Introhive, have all received funding from sources outside the region.

Affinio, which raised $4 million in a funding round led by Whitecap Venture Partners in late 2015, exemplifies the traits of the portfolio's stronger companies, said Keefe.

The company has continued to build momentum in hiring and revenue, and is now closing deals with major corporations.

In the same vein, Barbara said Resson is bringing on new high-profile clients.

Two of those are McCain Foods and agricultural giant Monsanto, both of which participated in the company’s $14 million funding round last spring.

Barbara said the company is hiring new senior executives, and has been building up its client base among large-scale agricultural concerns.

The two Build principals said that their portfolio is a meritocracy, and they have capital reserved to re-invest in the companies that perform the best.

Even after they stop investing Fund 1 capital in new companies next year, there will be capital to reward good companies.

Said Keefe: “We’re very pleased with the status of the portfolio given where we are in the life cycle of the fund, the caveat being that it’s still very early and we have a long way to go.”