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    NewsJanuary 15, 2025

    Fireroad Ventures 2024 Year in Review

    2024 Narrative

    From the outset, 2024 was a year where we focused on raising Fireroad Ventures Fund I. Q1 2024 was a month of scouring our networks for LP prospects and partnering with organizations like Cintrifuse and Ohio Angel Collective to host founder events like the Startup Cincy Demo Nights.

    In Q1, we made one new investment: Narratize.

    On the fundraising front, we became more focused in our outreach to first-time LPs, later-stage founders, and business owners as investors heading into the spring. Events like the workshop Sue Bevan Baggott helped me host in March and a handful of Happy Hours we hosted throughout the spring proved important to help investors who were considering participation get to know the asset class, our team, and our mission.

    We started working to amend our operating agreement in May so that our distribution waterfall was more favorable to LPs after receiving important feedback from a couple of different institutional investors. Through that process of amending our operating agreement I continued to be humbled by and grateful for the trust of our LPs — both in their encouragement through the process and their willingness to be responsive with paperwork and updates.

    Fireroad worked with Ocean Accelerator for the second year as the capital partner, so our team spent time recruiting, screening, interviewing and researching the applications for that program along with the team at Ocean. Of the 175 applications, five were selected for the program and we invested in four of the five companies. Fireroad didn't invest in the fifth accelerator company because it was a competitor to an established portfolio company.

    In late spring our first investment, Tembo, became our first markup when the team closed a Series A that was lead by GreatPoint Ventures.

    Our summer continued to focus on fundraising and our partnership with Ocean Accelerator. The accelerator program launched with a week in Cincinnati, hosted at the 1819 Innovation Hub. A great group of experienced operators and founders joined the week to lead workshops, participate in panel discussions, and share meals with the cohort.

    ESGentle, Good Agriculture, Palli, and SMB.co joined the Fireroad portfolio as part of the Ocean Accelerator cohort.

    The group convened again in Boulder, CO at the end of July. Both Tim and I made the trip out to spend focused time with the founders and coordinate introductions to other investors.

    On that same trip to Colorado, I hosted a morning retreat for female founders alongside my friend Mindy Caliguire, who is the founder of Soul Care. Two founders from LA, one from Denver, and an angel investor from San Diego joined for the morning, where we discussed co-founder relationships and the tension of building vs raising capital. The work Mindy does and her hospitality has been invaluable in these early Fireroad days. (If you're ever in the Denver/Boulder area and are looking for a private place to reflect or read, be sure to consider Whisper Ranch).

    As we establish Fireroad's venture practice, it's essential to have meaningful relationships with co-investors and potential follow-on investors for our portfolio. Denver has been a welcoming ecosystem, with good density of active angels and other venture firms that invest early and at terms similar to Fireroad. Many thanks to Clay Gordon (Stout Street), Alex Houghtalin (Access Ventures), Kyle Barrios (Rockies Venture Club), Derrick Kelsey (Rockies Seed Fund), Amy Brandenberg (Denver Angels), and Rich Maloy (Springtime Ventures) for spending a morning with us for rapid-fire investor feedback sessions.

    Our fundraising efforts picked up momentum over the summer as our Final Close drew nearer. With the changes to our operating agreement, we brought on our first fund-of-funds LP and made it to diligence with a second institutional LP. The second institutional prospect ended up requiring more time to work through their diligence process than our fundraising window allowed, so we didn't close that opportunity, but continue to stay in touch with that group for future funds.

    I'm never really sure if September is considered "summer" or "fall," but it was a big month for us — so much so that it almost needs it's own section in our annual review.

    Another one of our earliest investments, Anadro, closed their Seed round in early September, which brought our second markup in the portfolio.

    Along with a lot of travel for our team, September was our last month to raise Fund I.

    25% of our subscribed LPs came on board in the final four weeks of the fundraising period, and we were finalizing subscription documents until 11pm on the night of Fund I's final close. We learned a lot about fundraising and human nature with this first offering, and we'll carry those lessons forward with us as we begin designing Fund II and strategizing for that fundraising cycle.

    Once the flurry of fundraising subsided, we refocused on investing and brought four new companies into the portfolio:

    • DifferentKind - setting the standard for evidence-based dental patient experience measurement, reporting, and reimbursement
    • Flamel - unifying and automating digital marketing for multi-location franchises
    • Level 6 Cybersecurity - giving CISOs and Directors holistic views and models of threats and risks to make informed and strategic resource decisions
    • Toolsey - making "speed to lead" lightning fast for home service companies with integrations, automations, and intelligence

    Fireroad was part of an accelerator program ourselves, the Coolwater Capital program for emerging managers. The program was an investment on multiple fronts, and my goal going into it was to more clearly define and prioritize the areas of our work where we could level-up in preparation for Fund II.

    Working and learning alongside other emerging managers, as well as the established GPs who presented to the group, reminded me of how helpful it is to be connected to other people in the same season of their work. I learned from a great number of fund-of-fund managers and family offices, and understand that part of private equity with significantly more depth and nuance. The program underscored the importance of telling our story in such a way that our background, track record, and strategy for future investing create our advantage in sourcing, picking, and managing a valuable portfolio within the dynamics our market.

    The program also helped me develop a strategy and sequence for building out the back office work of Fireroad Ventures, combining both internal talent and skills with great external service providers. As an immediate result, we've engaged with a new tax and audit team which will be able to support us well as we grow in the coming decades. Our team small through Fund II; as we build the firm, we'll continue working with professional Fund Admin services and focus first on building our internal investing team.

    At the end of the calendar year, Narratize closed an additional round of funding: our third markup.

    A Year's Worth of Shoutouts

    The Cincy Startup Ecosystem for making endless introductions to founders, partners, and LPs. In particular the teams at:

    Our legal team at Frost Brown Todd, particularly Zach Bahorik and Joe Brammer, for their work on our behalf during the these formation years, their availability to troubleshoot and work through different questions, and their friendly presence in our network.

    Sue Bevan Baggott and Silvia Mah for their constant encouragement, wisdom and advocacy to make venture less mysterious and more accessible for both investors and founders alike.

    Mike Quesnell, Dan Rye, James Mathews, and Hailey Hite for going above & beyond in their support of our portfolio founders in the Ocean Accelerator cohort.

    Sean Chung and Winter Mead from Coolwater Capital for their leadership in the program and 1:1 feedback during office hours, as well as Nick Tippmann for connecting us with the opportunity.

    Fund I Portfolio Highlights

    Toolsey is launching their partnership with Owens Corning, a distribution partner to tens of thousands of roofing contractors hearing about how Toolsey can help them manage leads. Owens Corning is bringing the Toolsey team to a number of sales conferences and meetings in the coming weeks.

    Narratize was recently accepted into the AWS Solutions Library, reinforcing its position as a trusted, secure, and scalable AI solution that enhances R&D and product team productivity.

    ESGentle launches in-store pilots this month with Superior Grocers and Grocery Outlet to display product-level sustainability data to shoppers through the on-cart monitor

    Portfolio Snapshots

    We are half way through the initial investing period on Fund I and half way through our initial investments, with 18 companies in the portfolio. Of the Fund I early investments we have made, three have graduated to Seed or Series A funding and two have raised additional SAFE/Convertible Notes with valuations higher than when Fireroad invested.

    • 16 companies
    • 81% outside major tech hubs, 27% portfolio greater Cincinnati
    • States represented: GA (2), CA (3), IN (1), OH (3), KY (2, both NKY), CO (1), NJ (1), TX (2)
    • 33% portfolio has 1 or more female founders
    • 33% portfolio has a diverse founding team

    Every 6-8 weeks, we take the "pulse" of founders in the portfolio, checking in on how they are doing in different dimensions of life, and then rally our network and resources to offer support. This is called our Founder Flourishing program, and here is our 2024 review of the program.

    VC Market Thoughts

    Borrowing from Tim Metzner's (Fireroad's CEO) Annual Letter:

    One of the biggest headwinds we faced in 2024 was the venture capital fundraising environment. You would have to go all the way back to 2014 to find a year in which less money was raised by VC firms than in 2023 or 2024. But we did it: we closed an early-stage fund one, in Ohio in 2024. In October we put a bow on a $5M pre-seed fund, Fireroad Ventures Fund I. As it turns out, we were one of only six first time funds raised in the Great Lakes region from the 2023 vintage.

    We're not in the business of trying to predict markets, but we are bullish on the likelihood of a much more "venture-friendly" environment when we kick off Fireroad Ventures Fund II.

    It has also been encouraging watching the Service Titan IPO and how the public markets have responded. The lack of liquidity in Venture is one of the reasons it has been such a challenging environment to raise a venture fund; seeing a few successive IPO's that go well and return significant capital to VCs is needed wind in the sails of VCs.

    Dealflow continues to be healthy. Over time, the sectors where Fireroad can invest with the most wisdom and be the most helpful are becoming more clear. We're continuing to build momentum toward a thesis of investing in startups who are solving problems for small businesses and service sectors, where Fireroad LPs and partners in the Holdings side of the Fireroad platform create a unique advantage in sourcing, screening, and growing venture-scale opportunities. Service Titan is one of the early players in the space, so it's great to see public markets responding positively to its IPO with a market cap of over $8.5B (at the time of writing this).

    Closing Thoughts

    Fireroad Ventures is in the early days of becoming the investor-of-choice for founders who are solving problems for SMBs. From main street to commercial corridors and manufacturing zones, the businesses that employ our neighbors are facing challenges in each facet of their business operations. Leaders of these SMBs invest in technology to help solve their problems when it is hyper-relevant to their industry, straight forward to deploy, and aligns with their ethos and workflows.

    Hyperbolic predictions about human work in the age of AI abound and venture capital investors have a role to play. Without straying too far into techno-dystopian imagination, there are decisions to be made about what should be built.

    Fireroad is an actor in the economy of innovation, and we participate by backing founders who are addressing multi-billion dollar problems with human dignity as a foundational design principle, who have a distinctly empathetic view of their customers and their workforces, and who steward their own energy, resources, and relationships with wisdom.

    As we mark the halfway point of our Fund I deployment, we are meeting countless founders who share this vision for their work and impact.

    It is just as vital that we are partnered with investors who share this vision.

    We are immeasurably grateful to have a group of LPs who individually trust Fireroad to steward their capital to that end. To effectively partner with leaders into the coming decades, Fireroad will continue to build on this foundation and develop relationships with new partners and investors. Fund I is an important beginning.

    Christy Johnson
    Partner | Fireroad Ventures