Investment fund looks to put Sonoma, Marin startups in the spotlight

In the shadow of the startup capital of the U.S. , Sonoma and Marin counties are typically overlooked as a place where one looks for the next entrepreneurs who could spur disruption in the nation’s economy.

But Zachary Kushel wants to end the notion you have to be in San Francisco or Silicon Valley to have a good idea that can be put into the marketplace. Kushel is founder and managing partner of Marin Sonoma Impact Ventures, a Corte Madera-based investment fund that has backed three North Bay companies so far. The fund also sponsors networking events, mentorship opportunities and other efforts to boost local job creation and create a better hotbed for entrepreneurs even if it doesn’t take an equity stake in the company.

Kushel felt the pull to launch so much that he left his position as head of business development at Glassdoor in Mill Valley to lead formation of the fund in 2019. It is financed by local investors, including Blair Kellison, the former chief executive officer of Sebastopol-based Traditional Medicinals.

“I don't think we fully appreciate how much economic activity there is happening just in these two counties on (the Highway 101) corridor,” Kushel said. “Compared to the rest of Silicon Valley, there's not much going on. But compared to any other region around the country and around the world? Holy moly. There's a ton going on here.”

Kushel’s effort is notable in two respects. First, he is looking at business development over a large jurisdiction without regard to the specific industry ― to get them out of their own silos. That typically has not been done before. The purview of most trade groups have been focused on specific locations, such as the Sonoma County Economic Development Board or the Marin Economic Forum; or on specific fields, such as Naturally North Bay, a group that represents natural and organic product companies in the area; or trade groups that represent specific industries, such as wine or agriculture.

“I think he's (Kushel) really taking a nice whole-systems approach to how do we create conditions conducive for the kind of startup businesses want to see to thrive in this area? And he's thinking about that in a much bigger way than just providing funding. And to me that's so refreshing,” said Ryan Johnston, chief executive officer of Biotic Ferments in Petaluma.

The company produces kvass, a traditional eastern European fermented drink that has been updated for modern consumers with flavors of turmeric, ginger and pineapple. Biotic has not taken funding from Marin Sonoma Impact Ventures, but Johnston said he and his family-owned business appreciate how the fund’s mixers and meetings have allowed them to connect with other entrepreneurs as they grow their businesses and learn from the experiences of others. The company has a new passion fruit flavor that will come out soon, and also will ramp up its keg distribution for bars and restaurants in the coming year.

“It really inspires a new kind of thinking. Like me talking to someone who’s in tech about marketing. That is beneficial. We’re not in competition with each other in any way,” Johnston said. “These kinds of connections are super interesting.”

The other aspect of Kushel’s thinking is to reexamine the traditional economic development outreach based on landing companies to be housed or to expand in the North Bay. That approach has been used notably by the state of Texas to siphon off corporate headquarters from California.

Locally, there was speculation in recent years that tech companies, such as Google, were looking at satellite campuses in the region, like the old Fireman’s Fund Insurance site in north Novato. Instead, the focus should be on cultivating the more than 750,000 residents who live along the affluent Highway 101 corridor, many of whom are highly educated within various fields and are open to doing their own thing, Kushel said.

“We have all this untapped potential,” said Kushel, who worked in politics before joining the corporate world with a resume that included a stint at Cisco Systems. He argues that greater diversification within the economy will help both Marin and Sonoma counties better insulate themselves from challenges of climate change, wildfires or the next pandemic.

“We need to be making diversified investments in diversified sectors that might actually be more insulated from the ravages (of climate change and other threats),” he said.

An example of that is Finalis, an investment banking firm based in Corte Madera. The company is one that Kushel’s fund has invested in along with New Retirement, a financial planning technology solution in Mill Valley; and Novi, a Larkspur-based technology platform for the consumer-packaged goods sector. The fund did not release financial details of its investments and its filings with the Securities and Exchange Commission have not yet disclosed such data.

Federico Baradello, founder and CEO of Finalis, grew up in Marin County and worked in other areas around the Bay Area before launching his company in May 2020.

Finalis offers a simpler option for processing documents related to financial deals through a cloud-based solution that allows brokers to process their transactions and communicate with a compliance officer. The company employs 80 people working remotely but there are plans to have a physical office in the future, Baradello said.

Baradello said he hopes his company can join in changing the notion that Marin County is more of a bedroom community for workers to commute into San Francisco ― especially as the pandemic has opened the possibility to more remote workplace opportunities and hybrid options.

“The whole concept of bedroom community changes when people are working out of their bedrooms,” he said. “Maybe, you can live and work and scale a successful software company from a bedroom community … I think this really presents a unique opportunity for both Marin and Sonoma counties.”

Kellison, who recently left Traditional Medicinals, said he likes what Kushel has created, as well as the opportunity that exists for the future of local companies as they grow.

“We’re investing in our ecosystem,” he said. “My passion is for helping companies and people to reach their full potential.”

You can reach Staff Writer Bill Swindell at 707-521-5223 or bill.swindell@pressdemocrat.com. On Twitter @BillSwindell.