By Brian Cox
At Traction Capital, we believe the next generation of standout companies is being built far from the coasts. With Fund II, we’re doubling down on the Midwest, investing in and acquiring strong, scalable businesses with roots in Minnesota and the surrounding region.
A Hybrid Approach: Investing and Acquiring
Fund II is a $40-60 million hybrid fund evenly split between early-stage investments and acquisitions. This dual approach allows us to support founders and owners at different stages of the business lifecycle, whether they’re looking to scale or preparing for succession.
Early-Stage Investment Thesis
For early-stage investments, we back post-revenue companies generating between $250K–$5M in annual revenue. Our sweet spot is businesses with strong founding teams, cash efficiency, and a clear path to profitability. We’re typically the first institutional check, writing $500K–$1M checks into companies that are:
- Headquartered in the Midwest
- Targeting an exit of $15–$50M within 3–7 years
- Operating in industries such as software, e-commerce, manufacturing, technology, or business services
- Looking for a hands-on partner who adds value beyond capital
We seek founders who are industry experts and ready to scale responsibly, with an eye toward a strategic or private equity-backed exit.
Acquisition Criteria
On the acquisition side, Fund II targets profitable, growing businesses with:
- $500K–$3M in EBITDA
- Enterprise values between $2M–$20M
- Key leadership willing to stay on post-close
- Headquarters in the Midwest (with a preference for Minnesota)
- Operating in industries such as manufacturing, software, or e-commerce
Our team brings operational experience, strategic planning, and a Midwestern ethos to every acquisition. We know how to work with owners who’ve built something special and want to see it thrive into the next chapter.
Why Traction?
We’re not just a check, we’re a partner. Traction Capital is a hands-on fund that brings meaningful operational support to every portfolio company. We help teams implement the Entrepreneurial Operating System (EOS), offer access to our in-house suite of VPs for guidance in finance, budgeting, operations, sales, marketing, and more. Every founder is paired with a Strategic Growth Partner (SGP)—a seasoned mentor who meets bi-weekly to provide coaching, accountability, or simply a trusted sounding board.
Our community of LPs is another powerful asset: over 80% are entrepreneurs with deep experience across a range of industries. Whether you’re hiring a key role, navigating a strategic inflection point, or preparing for exit, our investors can help. Most are based in the Midwest, and we regularly bring everyone together through in-person events that foster genuine connection and collaboration.
Want to Partner With Us?
If you’re a founder, owner, or advisor looking to connect, the best way to start the conversation is by filling out the form on our website. We also offer a referral program: if you introduce us to an acquisition opportunity that closes—and isn’t already brokered—we’ll pay up to $50,000. To make the introduction, just fill out the form on our website.