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Fraser Hall and Dan Eisenhardt have launched the Vancouver Founder Fund.

Vancouver startup types talk of emulating the "Paypal Mafia" in Canada, a nod to employees and founders of the payments company who reinvested their bounty from its 2002 sale into other successful ventures including YouTube, Tesla Motors and LinkedIn.

They're off to a good start: Several West Coast entrepreneurs, including Hootsuite chief executive officer Ryan Holmes, Plentyoffish.com founder Markus Frind and ex-Coastal Contacts CEO Roger Hardy have plowed millions of their net worth into other startups, in the hopes of creating what Mr. Holmes has dubbed the "Maple Syrup Mafia."

Now, a new Vancouver-based venture fund founded and financed largely by local entrepreneurs is hoping to pour a little more local cash over the flourishing local startup scene.

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Fresh off their sale last June of wearable technology company Recon Instruments to Intel for $175-million, the Vancouver startup's former CEO Dan Eisenhardt and chairman Fraser Hall have launched the Vancouver Founder Fund (VFF). The Recon co-founders hope the $10-million venture capital pool – which could grow to as high as $15-million in the coming weeks if they can bring on more investors – will spur on development of promising early-stage tech startups primarily in the Vancouver area.

The two, along with associate Jay Rhind, have tapped 15 other limited partners, 11 of whom work and live in Vancouver, and another four based in Europe. Investors, who have kicked in at least $250,000 each, include ex-Recon investors, friends, and past and present CEOs who have invested successfully in startups.

"It's a fund by founders, for founders," said Mr. Hall, a veteran startup financier. "There's essentially a vacuum of seed funding in Vancouver that is founder-friendly and tech-focused. We felt it was time to kick-start the tech community here and form a fund of our own and put our money where our mouths are. We are setting out to be the funding partner we always wished we had as entrepreneurs."

The VFF crew is hoping to bring a different approach to the domestic venture capital landscape. Mr. Hall says he wants to avoid experiences he's had with other VCs where the financiers imposed their interests on portfolio companies, aiming to generate quick returns sometimes at odds with the best long-term interests of the companies.

"It comes down to funder-and-founder alignment. And further, they often have little experience in the domain, but they want to drive the boat," Mr. Hall said. Rather than treat their investments "as portfolio companies, we want them to be partners, and we want to sit on the same side of the table as them, not the opposite side," while trying to both get in the trenches to help companies but also know when to "have the humility to step back" and let them create value, Mr. Eisenhardt said. Asked if startups would welcome that kind of relationship, Mr. Hall replied: "We're essentially beating them away at the door right now" even though the fund hasn't actively marketed itself yet.

Where typical VCs expect a large number of their investments to fail – and just a handful to earn outsized returns to compensate for the rest – Mr. Eisenhardt says that's not the VFF approach. "We're not playing a numbers game," he said. "It's part of our vision to defy standard venture failure rates" and ensure all their companies succeed. "It's a very tall order; that's the vision we have."

The group plans to make seed investments of between $100,000 and $1-million in early-stage enterprises and focus on a small number of firms, rather than spreading themselves out broadly over a larger portfolio. The fund, which is set to last for seven years, has already made its first investment, in fantasy sports site eSportsPools.

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