Keehner promoted to principal, will manage new fund
Next Level Ventures (NLV) is raising capital for a new fund that will be dedicated to investing in Iowa startups, the Des Moines-based venture capital firm told the Business Record.
Next Level Ventures Fund 3 will be NLV’s fifth venture fund and its third focused on Iowa startups.
Liz Keehner, who was recently promoted to principal at NLV, said some of the drivers to launch Fund 3 include the firm noticing an increase in the number of startups raising capital and a specific need among companies that are ready to scale.
NLV will be targeting companies that are approaching or have found product-market fit and are raising $1 million to $4 million to scale their business.
“We’re still seeing this gap of companies when they get ready to scale and they need that first Series A round, there’s no one here in the state of Iowa who’s really able to provide that funding,” Keehner said.
The fund also comes at a time when some shifts are happening in Iowa’s venture capital landscape. ISA Ventures is not raising another fund and spun off Novy, Iowa’s first venture studio, and two Plains Angels co-founders and Ag Startup Engine are both raising funds for Iowa’s earliest stage startups.
Keehner said the fund is also important now because the rising deal flow is an opportunity to capture the impact and returns from innovation happening across the state to be reinvested in the future.
“We thought if the purpose of this [fund] is to spur economic development while also providing returns for our investors, Iowa investors should be capturing more of this,” she said.
Having a supply of growth-stage capital available in Iowa to fund startups when they are adding jobs can also support Iowa’s workforce and help keep their operations in-state, she said.
Similar to its first two Iowa funds, NLV is aiming to raise $40 million to $50 million to invest in 15 to 20 new companies, but this fund will emphasize investments in ag tech and bioscience companies.
“We’re seeing a lot of deal flow there,” Keehner said. “Also, Iowa is a leader in agriculture, bioscience, advanced manufacturing and health care, which all play into the ag and biotech space, and our proximity to these industries and its stakeholders provide strategic alignment for the companies we back.”
The focus also positions NLV to potentially invest in younger companies that have grown after receiving early-stage investment from industry-specific funds like Ag Startup Engine, she said.
NLV embarked on its third Iowa fund after fully investing the capital from Funds 1 and 2 and getting enough returns back to the funds’ investors, also known as limited partners. Craig Ibsen, managing partner at NLV, said the pandemic slowed down companies’ path to exiting, and in turn, slowed the delivery of returns.
“That’s a little bit why we were a little delayed coming to market with Next Level Ventures Fund 3 was waiting on some of those exits,” Ibsen said.
Next Level Ventures Fund 3 is certified to receive the Iowa Economic Development Authority’s Innovation Fund Tax Credit. The state program provides the individual investors who invest in a certified Innovation Fund tax credits equal to 25% of their equity investment.
“Without that tax credit, we wouldn’t exist as a firm and we wouldn’t be employing 11 people today, and we wouldn’t have created over 600 jobs and invested over $60 million,” Ibsen said.
NLV’s core group of limited partners for its past two Iowa funds have consisted of Iowa insurance companies and credit unions. Ibsen said they encouraged NLV to launch Fund 3.
“They’re Iowa institutions, they expect an appropriate return on their invested capital, but they’ve also made the decision to invest in their backyard where their employees live and work, so for them it’s a double bottom line mission,” he said.
That investor base also allows NLV to invest in industries like biotech that can have a longer path to returns.
“We’re fortunate being not only in the Midwest but with the [limited partner] base that we have to be a bit more patient. We can invest in these things that may take a little bit longer to commercialize, but truly have not only huge impact, but a great ROI profile,” Keehner said.
NLV will be in the market for accredited investors in 2025 as well as starting to source deals and make its first investments from the fund, Keehner said.
Keehner shares her path to becoming a fund manager
After leading several of the investments NLV made from Fund 2, Keehner will manage Fund 3 and lead the search for new investment opportunities.
Keehner joined Next Level Ventures in 2021 as an associate and was named principal in October 2024. She said stepping into the new role is a “very proud moment for myself, but also for women in venture.” She said only 2.4% of women working in venture capital are decision-makers — and that statistic is one of the things that drew her into the field.
“What’s funny is when I got into venture, I had heard this statistic that less than 2% of funding goes to women entrepreneurs,” she said. “That hasn’t changed in 10 years, so personally, empowering women, not only entrepreneurs but other women in venture, is something that’s really important to me.”
A documentary fan, she knew she wanted to go into venture capital after watching “Something Ventured” about the godfathers of venture capital. She graduated from the University of Northern Iowa with a degree in finance with her mind settled on a goal — “to invest in people who have really great ideas and are looking to change the world.”
“I’m a bit altruistic in my view of the world, so that was really what pushed me and haven’t looked back,” she said.
Venture capital opportunities in Iowa were few in 2013, so she went to Austin, Texas to start her career. But since returning in 2018, she has had more direct experience with investing than she got outside of the state, she said.
She now speaks to students at Iowa universities who are interested in finance or investing to share that venture capital is an alternative to traditional finance paths.
“I think the more innovation that happens here in the state, the more people start to pay attention to this ecosystem and how you can participate in this ecosystem, it’s not just being an entrepreneur,” she said.