Bolt is heading west after closing a $25 million second venture fund.
The Boston-based investor and manufacturing consultant is opening West Coast operations in San Francisco, in a fabrication facility owned by Autodesk, one of its financiers. Bolt plans to hire California-based engineers to work with local portfolio companies, possibly growing its current staff of 10 to no more than 15, said cofounder and managing partner Ben Einstein.
Autodesk was one of a few investors, along with Logitech and Grishin Robotics, who contributed to the new $25 million fund after also participating in the company’s first fund. Cisco Investments is a new investor.
Bolt closed $3.5 million in financing two years ago to launch its Boston-based venture, which invests in and develops early stage manufacturing businesses. Since it revealed in July 2013 the first seven companies that it accepted from about 850 initial applicants, the firm has added about one business to its portfolio per month.
“That will be the same investment pace, of 12 to 15 companies per year,” Einstein said in a telephone interview. “Some may be internal companies we have worked with. Some may be outside companies.”
While the small size of the first fund limited investing to a max of about $50,000 per business, this go-around will let Bolt contribute as much as $500,000 per investment. Bolt may also invest alongside other venture funds, who are seeking firms like Bolt, with its expertise in manufacturing, to support their portfolio companies, Einstein said.
Bolt exchanges the cash investment for between 5 percent to 15 percent of common stock, typically around 8 percent, Einstein said. It works closely with the companies it invests in, especially if a startup needs assistance with anything from optimally designing a part so that it can be manufactured in China to shipping inventory, he said.
“We want to act like co-owners, and work with them, work with them everyday and build the business,” Einstein said. “With someone who isn’t sure how to manufacture a part, one of our guys will sit down with them for 12 hours or whatever it may be.”
Securing the Autodesk facility is key to Bolt’s ability to operate in San Francisco, where the firm had been seeing increasing interest from companies, Einstein said. Like its 9,000-square-foot space near Downtown Crossing in Boston, the Bay Area location has digital fabrication and 3D-printing labs, as well as metalworking, woodworking and electronics workshops. All of the Bolt portfolio companies will have access to the space, he said.
Einstein expects to make new investments for about three years, after which it may pursue a new fundraising round. Bolt’s other partners are former Atlas Venture investor Axel Bichara and Dragon Innovation CEO Scott Miller, who was an early iRobot executive.
“It’s a pretty different model” for a seed fund, Einstein said. “It’s kind of like as if a design consultant and a venture firm had a baby.”
