#United States #Minneapolis #Fund II #Traction Capital #Minnesota Start-Ups

Traction Capital Introduces Fund II

On June 24, 2025, Traction Capital, a prominent venture capital and growth equity firm based in Minnesota, unveiled Fund II, its second investment fund designed specifically to bolster the growth of early-stage businesses throughout Minnesota and its adjacent states. Following its launch in March, Fund II has impressively raised over $30 million in subscriptions, with fundraising goals set between $40 million and $60 million. The fund has already made significant investments in local companies including Blank Metal—a firm that facilitates the integration of state-of-the-art artificial intelligence solutions into business operations—and PARQA, a consulting company that aids staffing and recruiting agencies in modernization strategies.

Building on the success of its inaugural fund, Traction Capital seeks to continue its investment strategy focused on high-potential businesses. The firm prides itself on providing "smart" capital, which combines essential financial backing and strategic mentorship tailored to help founders navigate the complexities of scaling their operations. Fund II aims to support Midwest companies that possess scalable business models and a firm commitment to leadership.

The team at Traction Capital, which consists of seasoned entrepreneurs and experienced business operators, specializes in working closely with founders eager to expand their businesses. By employing a hands-on approach and utilizing a robust network of over 80% small business owners as investors, the firm ensures that its portfolio companies benefit from crucial industry resources and expertise.

Shane Erickson, the Managing Partner at Traction Capital, expressed enthusiasm about the launch of Fund II, emphasizing their dedication to supporting exceptional founders. He remarked, "As entrepreneurs ourselves, we understand the challenges of scaling a business. We don’t merely invest; we provide practical expertise to empower our portfolio companies. The triumph of our first fund demonstrated that the combination of financial investment and strategic insight can lead to remarkable outcomes. With Fund II, we are reinforcing our commitment to energizing businesses in the Midwest."

To further enhance the capabilities of Fund II, Traction Capital has recently brought Matt Meents onboard as a Strategic Growth Partner. With over 25 years of experience in nurturing company growth, Meents is recognized as a leader in the startup ecosystem. He co-founded Magnet360, driving it to achieve $50 million in annual revenue before its acquisition in 2016. He went on to co-found Yardstik, where he experienced notable growth, before transitioning into a governance role. At Traction Capital, Meents will be instrumental in guiding founders through their growth trajectories and addressing scaling challenges.

The firm’s first fund was successful in making strategic investments in 13 companies and facilitating two acquisitions, resulting in significant milestones for these businesses. Notably, Kwikly earned recognition on the Inc. 5000 list three times and was honored as Minnesota’s fastest-growing private company in 2024. GoRout experienced a remarkable growth surge and product diversification, while TroutRoutes successfully exited through its sale to onX. Additionally, Traction Capital enabled five portfolio companies to secure further funding, facilitating additional capital raises for their continued growth.

About Traction Capital

Founded in 2020, Traction Capital is a Minnesota-based venture capital and growth equity firm formed by successful entrepreneurs and business proprietors. The firm focuses on investing in and acquiring early-stage and profitable businesses that face challenges in accessing capital. Traction Capital operates on the belief that investing not only financial capital but also "smart" capital—coupled with a proven business management framework (EOS®)—during critical growth periods can significantly enhance a company’s trajectory. They assist founders with strategic execution derived from their own experiences and those of their investor network, preparing businesses for attractive valuations and successful exits.

For more information, visit Traction Capital.