Next Frontier Capital Aims to Raise $20 million to Fund Montana’s Next Generation of Job Creators

By Christina Henderson

“There’s just an incredible love and admiration for this state, where people want to deploy their assets against it. Until now, there wasn’t really a mechanism for people to do that.”

Will Price, Founder and Managing Partner, Next Frontier Capital

Montana’s business community got a huge boost in May when Next Frontier Capital, a Bozeman-based venture capital firm, announced the initial closing of its inaugural $20 million fund.


Will Price, Founder and Managing Partner, Next Frontier Capital in Bozeman.

Founder and Managing Partner Will Price spoke on the Montana High Tech Business Alliance’s Big Sky Innovation panel at the Montana High Tech Jobs Summit in September. At that time, Next Frontier Capital had raised $12 million to invest in Montana companies with the goal of raising $20 million by the fund’s final closing.

According to Price, Next Frontier Capital is seeking Montana technology investment opportunities in industries like software, healthcare, biotech, and optics/photonics with high intellectual property values. Price and his partner, Richard Harjes, hope to invest in 10 to 12 Montana companies over the next three to four years in amounts ranging from $200,000 to $1,500,000.

The Next Frontier Capital team hopes to dramatically improve entrepreneurs’ access to capital in the state – an ongoing problem in Montana.

Montana Ranks #1 for Entrepreneurial Activity, Dead Last for VC Funding

In June 2015, Montana was ranked the #1 state for entrepreneurial activity for the third year in a row by the Kauffman Foundation in its 2015 Index of Entrepreneurial Activity. Montana’s index of 4.2 was more than twice the score of its next nearest competitor, Wyoming.

But in spite of this impressive rate of entrepreneurial activity, Montana still ranks dead last for venture capital dollars invested and number of VC deals – behind all 49 other states, the District of Columbia, and Puerto Rico – according to the National Venture Capital Association’s 2015 state-by-state report .

The Montana High Tech Business Alliance’s survey of 100 member firms in high tech and manufacturing published in February 2015 underscored the difficulties faced by Montana companies seeking financing. 22 percent of respondents named access to capital as their number one barrier to business growth. This was the second most common response behind access to skilled tech talent.

Next Frontier Capital’s first deal was a $1.4 million investment in Bozeman’s Site One Therapeutics, announced in July, 2015. Site One is developing an alternative to OxyContin and other highly-addictive chronic pain medicines, leveraging a partnership between Stanford and Montana State University.

Quantifying Montana’s Lack of Capital

Price moved to Bozeman in 2014 with plans to start another software business after founding two in the Bay Area. His kids are competitive skiers, and the family relocated in part so they could ski in high school. But as Price started meeting with people in the Montana business community, it quickly became clear to him that access to capital was a real challenge in the state.

“The Lack of capital is not just something people feel, it’s actually a very real, highly-quantified number,” Price said.

He points to Utah as an example of a comparable state that has attracted significantly more venture capital investment. According to Price, per capita, Montana has 94 percent of the research money that Utah universities get and 85 percent of Utah’s GDP. However, Montana gets less than one percent of Utah’s venture investments.

“[Montana gets] 99 times less venture capital despite having a very competitive research university, great job force, number of companies that are being developed, and GDP activities,” Price said. “The National Venture Capital Association says we get roughly $1 million per quarter invested in Montana. If you normalize what we should get if we try to compare ourselves to Utah it would be somewhere around $40 million a quarter. We could grow the venture money that’s invested 40 times and we would basically be on par with what Utah is getting for their companies.”

Price was convinced that Montana is undercapitalized due to something broken in the system, rather than lack of good investment opportunities.

Interviews Uncovered Need for a Montana-based VC Firm

To find a bridge across Montana’s venture capital gap, Price interviewed about 30 different venture capital firms, asking them what it would take to get them to invest in Montana. Four responses came up repeatedly:

  1. Having a local lead investor in the market who could source, syndicate, and manage deals because they weren’t in that geography.
  2. Ability to recruit an absolutely great team and attract people who want to move here.
  3. Belief that if you made an investment in Montana you’d find a second investment, so you could amortize your effort in traveling here across multiple investments.
  4. Direct flights to Bozeman from major centers of capital.

In founding Next Frontier Capital, Price hopes to have taken care of the first barrier to Montana attracting a more equitable share of venture capital dollars. He is confident that the number of good deals and quality of teams in Montana will support increased investment.

Richard Harjes, General Partner, Next Frontier Capital.

Richard Harjes, General Partner, Next Frontier Capital.

“We have about 70 companies we’re tracking and there are 225+ members in the Montana High Tech Business Alliance,” Price said. “There’s a large number of opportunities in Montana that we’re really excited about. These guys are recruiting great people.”

With help from the state Commerce Department, Price is also optimistic that Montana can get airlines to focus on the need for full time direct flights to Bozeman, Missoula, Billings and other major cities.

Price recruited, Harjes, a General Partner in Next Frontier Capital, to lend additional technical expertise to the team. Harjes was a Duke and Arizona professor who spent 20 years building high tech teams of physicists and mathematicians doing computerized trading. Harjes and his wife also run an organic lamb ranch in Montana.

Creating High-value Jobs and Wealth in Montana

According to Price, 85 percent of the limited partners in Next Frontier Capital Fund I are Montana-affiliated, meaning investors who are either Montana residents or have a second home in the state. Next Frontier Capital provides a vital conduit between wealthy individuals who recreate in Montana and local businesses looking for funding.

“There’s just an incredible love and admiration for this state, where people want to deploy their assets against it,” Price said. “Until now, there wasn’t really a mechanism for people to do that.”

Next Frontier Capital Fund will complement existing networks of angel investors in Montana, such as Frontier Angel Fund 2, Good Works Ventures, and Missoula Economic Partnership’s Angel Network. Angels typically invest smaller amounts – between $25,000 and $200,000.

Liz Marchi, the founder of Frontier Angel Funds 1 and 2, is positive about Next Frontier’s potential to grow Montana’s economy. “I am delighted to be a partner with Next Frontier Capital in building the next level of private equity necessary to create high value jobs and wealth in our state,” Marchi said in Flathead Living Magazine. “Montana’s economic history is one of our state being drained of value for the benefit of east and west coast wealth.  Next Frontier is a milestone for bringing that wealth back to work for us.”

In addition to direct investments, Next Frontier Capital plans to syndicate deals with out of state investors. “If we invest $20 million, which is our fund goal, that would be somewhere between $40 and $60 million in capital we can bring into the state,” Price said.

With plans to invest in more than 10 companies, Price also expects significant job creation. “With 20 people per company, we could easily create 200 jobs here in Montana,” he said. The jobs will require a diverse range of skills – not just technical.

“At public software companies about 13 percent of expenses are [research and development],” Price said. “R&D is an anchor, but 40 percent of jobs are in sales and marketing, 6-9 percent is [general and administrative]. So these jobs are not just computer science jobs.”

Top photo caption: Some of Montana’s biggest high tech and manufacturing job creators, including Will Price, Founder and Managing Director of Next Frontier Capital, spoke to an audience of 600 during the Big Sky Innovation panel at the Montana High Tech Jobs Summit in Bozeman September 14, 2015. At that time, Next Frontier Capital had raised $12 million to invest in Montana companies with the goal of raising $20 million by the fund’s final closing. Price and his partner, Richard Harjes, hope to invest in 10 to 12 Montana companies over the next three to four years in amounts ranging from $200,000 to $1,500,000.

Author: Christina Quick Henderson has served as executive director of the Montana High Tech Business Alliance since its launch in April, 2014. Henderson writes and speaks frequently on Montana business trends and high-growth companies for Montana Business Quarterly and other publications. She holds an English degree from the University of Iowa and an MBA from the University of Montana, Missoula.

Publisher: The Montana High Tech Business Alliance is a statewide membership organization made up of more than 245 high tech and manufacturing firms and affiliates. More information on the Alliance can be found at:

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