Opportunity is knocking for Iowa’s entrepreneurial companies. The Iowa Fund of Funds has invested in two more venture capital funds that have pledged to consider infusing capital into Iowa-based companies.

The Iowa Capital Investment Corp., which manages the Iowa Fund of Funds, last week announced that it has made commitments to invest in Richland Ventures of Nashville, Tenn., and Tonka Bay Equity Partners of Minnetonka, Minn.In return, the managers of those funds will be looking at Iowa companies for potential deals.

The Fund of Funds, a venture capital development program created by the state Legislature in 2002, is in the early stages of building a portfolio of up to 15 venture capital funds that will invest in companies ranging from start-ups to mature businesses nearing the buyout stage.

In its first investment last year, the Fund of Funds committed $5 million to St. Louis-based Prolog Ventures LLC (www.prologventures.com), which specializes in funding early-stage life sciences companies.

Now, the Fund of Funds has committed up to $7.5 million to Richland Ventures, which specializes in health-care and technology companies, and $5 million to Tonka Bay, which provides later-stage capital and mezzanine funding for manufacturing, distribution and business services companies.

“They bring extensive networks into the state,” said Stephen Ringlee, managing partner of Cimarron Capital Partners, an Oklahoma City-based venture capital firm that manages the Fund of Funds. “In terms of potential partners, management team members and a whole culture, I think (they) will enhance the ability of our companies to compete in a pretty competitive economy.”

Tonka Bay’s only prior venture investment in Iowa was with Cedar Rapids-based Hunter’s Specialties Inc., to assist that company in financing two acquisitions that have helped it nearly double its operating profits over a five-year period.

The Iowa Fund of Funds is the largest of about a dozen private investors that have invested in Tonka Bay’s newest fund, which has raised $125 million from about 50 investors, said Cary Musech, one of the firm’s managing partners.

“We have committed to a strong presence in Iowa, meaning regular calling on companies down there,” he said.

Richland Ventures, a venture capital limited partnership that has specialized in deals in the Southeast, was formed in 1985 and has managed more than $450 million in five venture funds that invest in early-stage companies. Richland is seeking to raise at least $150 million for its newest fund. The Iowa Public Employees’ Retirement System was an investor in an earlier Richland fund.

“It appears to us there aren’t a lot of second-stage funds in the (Iowa venture) market,” said James C. Hoffman, a Richland partner. “In order to get (start-up companies) to the next level, you need that. Hopefully, we’ll bring some of that to bear.” Hoffman said he hopes the fund will be able to begin investing later this year.

Prolog, meanwhile, has been actively looking at opportunities but has not yet made any investments, Ringlee said.

“One of the dynamics of this program is that we do not mandate they invest in Iowa deals,” he said. “But we’re confident that they’re going to find good Iowa deals. We want everyone to use good investing judgment, and not have to satisfy artificial requirements.”

The private investment funds will be made available as needed to venture capital funds in which the Fund of Funds invests, initially using a $10 million line of credit from West Des Moines-based West Bancorporation Inc. and a $5 million commitment from Wells Fargo Bank Iowa. The investments are backed by contingent state tax credits designed to limit the banks’ exposure to possible losses.

Ringlee said each of the venture funds welcomes inquiries from Iowa companies seeking capital, and that companies should contact the respective fund managers directly. More information about the new funds can be found at www.tonkabayequity.com and www.richlandventures.com.