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New VC firm Magarac Venture Partners to focus on Midwest based tech companies

Will Allen, Partner at Magarac Venture Partners and a 12-yr NFL veteran, joined Yahoo Finance Live to discuss the launch of the new VC firm Magarac Venture Partners.

Video Transcript

[MUSIC PLAYING]

ADAM SHAPIRO: OK, about 38 minutes to the closing bell, and I want to share with you that when you live in Cleveland, Ohio for about 10 years, you like to make fun of Pittsburgh. I mean, after all, it's snowing today in Pittsburgh, Pennsylvania. Very few good things come out of Pittsburgh, right? That would be a Clevelander saying that.

But actually, something terrific is coming out of Pittsburgh today, and to help us discuss that is former Steelers, or as they would say in Pittsburgh, Stellers, player, Will Allen. He is a partner with Magarac Venture Partners, and congratulations, because your VC firm is going to be targeting tech companies, not only in Pittsburgh, but Cleveland, and throughout the Midwest, and forgive me for poking fun at Pittsburgh, because I know Cleveland and Pittsburgh are like this. But tell us more about MVP.

WILL ALLEN: Yeah, I'm still feeling that heartburn from that Steelers Brown playoff game, so don't rub it in too much. But Magarac Venture Partners, MVP, is a Pittsburgh based venture fund, and we were targeting all the great assets here in Pittsburgh, like Carnegie Mellon University, University of Pittsburgh and Life Sciences, AI Robotics, and Autonomy, and Autonomous Driving Vehicles. There's so much happening here. Our robotics industry and companies have grown somewhat of 200%. There's just so many dynamic resources that we need to capture that value. So we're excited for this firm, I have some great partners in Jay Katarincic, Mike Stubler, and Zach Malone, and we're just ready to get after it.

SEANA SMITH: Well, congratulations on the new firm. I know you're focused on diversity, equity, and inclusion efforts. So just talk to us a little bit about that, and what specifically you're looking for from a founder's perspective, but then also from a board member perspective.

WILL ALLEN: Absolutely. Obviously, you don't want to just throw diversity out there. You want it to be meaningful and impactful, and you want to be intentional, and you have to look at the business case. And previously, with my partners, we looked historically at the investments they've made, and said, hey, we've had some great success, you guys have had some great success investing in diverse entrepreneurs because the dollars show it, the team show it, let's double down on that. Let's be more intentional in our actions.

So with this firm, we decided to direct capital towards that, and also be very intentional how the formation of the teams. The data shows that the more diverse the teams, the better the outcomes. So that's the business case, and we want to be really specific about it, so we're going to target that our firm is helping the entrepreneurs build teams that are diverse, saying that we want African-Americans, we want women, we want first generation immigrants, and other people from diverse backgrounds to form these teams. So we're excited about that as well.

ADAM SHAPIRO: Well, there's a form of that in the NFL, via the Rooney Rule, but I'm very curious, because a lot of tech folk and a lot of investors tend to, what people on the east coast call flyover. They don't realize that in Cleveland, you got Case Western, great engineering school, that as you pointed out, in Pittsburgh, Carnegie Mellon and AI, the development of AI in Pittsburgh. In fact, I think Uber, one of the original self-driving tests was in Pittsburgh. So can you tell us more about how you're targeting startups, and perhaps first round funding, firms that you're going to invest in?

WILL ALLEN: You're absolutely right. Historically, that's been an issue, and that's what's so great about this firm, is that capturing that value, being on the ground, having that unfair advantage at Carnegie Mellon, at University of Pitt, at the other companies that maybe spin out the entrepreneurs that may leave, the engineering talent that exists.

When you think about Carnegie Mellon and University of Pittsburgh, they rival with your Stanfords and your MITs of the world, with research, and all of the other, the great technologies that come out of those universities. So we're really excited to capture that, but also capture all those great universities like the Case Westerns, the Ohio States, and the Northwesterns across the Midwest. You can't overlook Illinois, and there are great engineers that come out of that university. So we're excited. It's a lot of huge potential that exists, there's a lot of corporates and supply chains to tap into, that we have great networks with, and entrepreneurs that are flourishing in this region.

SEANA SMITH: Well, how about the timing of your first investment? Anything that you can share with us on that?

WILL ALLEN: Yeah, we're still in our formation mode, and we can't share too much about it, but it's coming soon.

ADAM SHAPIRO: We look forward to when you can share that with us, because we want to have you come back, and I promise, I won't pick on Pittsburgh. But next time you are here, feel free to pick on Cleveland. I'll earn it, I'll deserve it. Will Allen is a partner at MVP. We wish you all the best and continued success.