Cairn Cross is probably best known as the Co-Founder of FreshTracks Capital, which has catalyzed more than $500 million in investments to high-growth Vermont companies since it was founded in 2000. FreshTracks has helped foster an investment ecosystem in Vermont and Northern New England that has continued to grow, inspiring other firms, investors, and entrepreneurs in the process. Cairn, an MFN member, shared his insights about how VCs can approach rural areas. Video by MFN Communications Associate Natalia Giacomozzi.

VIDEO TRANSCRIPT

I think the venture business is somewhat challenging for entrepreneurs. It’s certainly difficult to start a company because you have to focus on dozens of things simultaneously. Many entrepreneurs haven’t done that before. The same thing holds true as an investor, where you’re trying to understand and help your entrepreneurs with a set of challenging activities they have to do every day. You probably have to do that across a number of different industries. So it’s really challenging to do that whether you’re in a small town or a rural area, or a large market.

I think your focus in a smaller town or rural market is that you have to spend time, at least in the beginning, developing that market. So that means you have to support and help entrepreneurial training programs and economic development activities. You have to connect human resources with entrepreneurial experience with maybe under-experienced founders and entrepreneurs. So there’s a challenging amount of market development that has to happen.

I think in a larger urban market, that activity much more innately exists and has a longer history. So if you’re, I don’t know, to use Massachusetts, if you’re in Boston, there are lots of activities going on every day in the entrepreneurial ecosystem inside the 128 Corridor. So if you’re a venture investor in that market, while you may help with some of those activities and play a strong role, the reality is you may have more time to focus on deal generation activities, building a pipeline, and screening.

I think in the smaller markets and rural areas, a lot of time at the beginning, could be five years, could be a decade, where you’re doing part of your work is definitely that market development work and that market assistance work. And then, and only then, do you have enough companies, enough entrepreneurs, and hopefully more capital, because, you know, from experience, I can tell you that being the only venture capital firm in a market is not a particularly great thing. It is always good to have other investors to co-invest with, to diligence deals with, to work with, and it’s better for entrepreneurs to have multiple entry points into the investing world.