Gateway Capital just hit a milestone that signals the Midwest startup scene isn’t slowing down. The Milwaukee-based venture firm founded by Dana Guthrie announced the first close of its $25 million Fund II, clearing the way to start writing checks to early-stage companies. The move comes as regional VCs continue to prove that tech investing doesn’t require a Silicon Valley zip code.
Gateway Capital can now start hunting for its next portfolio companies. The Milwaukee venture firm announced it’s reached the first close of its $25 million Fund II, the crucial fundraising milestone that lets VCs begin making investments while they continue raising the rest of their target amount.
Founder Dana Guthrie’s firm joins a growing cohort of regional investors proving that venture capital is becoming increasingly distributed across the United States. While coastal markets still dominate deal flow, Midwest-focused funds have been steadily building momentum, backed by limited partners who see opportunity in lower valuations and less competitive deal environments.
The first close structure is standard practice in venture capital fundraising. It allows firms to start deploying capital once they’ve secured a minimum threshold of commitments, typically around 50-60% of their target fund size. This means Gateway Capital likely has north of $12-15 million already committed from limited partners, with the remaining capital expected to close over the coming months.
For Milwaukee’s startup ecosystem, the timing couldn’t be better. Regional tech hubs have been fighting for years to prove they can compete with traditional venture markets, and dedicated local capital is essential infrastructure. When founders can raise early-stage checks without relocating to San Francisco or New York, it creates a virtuous cycle that keeps talent and companies rooted in their communities.
Gateway Capital’s Fund II suggests the firm found success with its first vehicle. Most VC firms only raise subsequent funds when they’ve demonstrated returns or at least strong portfolio performance to their existing investors. The ability to secure commitments for a second fund, even in a challenging fundraising environment, indicates limited partners see promise in Guthrie’s investment thesis.
