Three of the UK’s leading private investor networks have joined forces as iGabriel merges with the VCR/Pi Capital partnership that was formed in May this year. The 30 members of iGabriel will join the Pi Capital Investors Club, giving the group a total network of around 550 members. David Giampaolo, CEO of VCR/Pi, said: “We are now the only organisation with enough scale to attract the best deals and to add significant post-investment value.”
iGabriel has invested in VCR/Pi for a 15 per cent stake in the entity, which Giampaolo says is likely to be renamed. The iGabriel network will continue to own and manage its portfolio of six early stage technology investments. The GBP8 million fund raised from iGabriel’s members is now fully invested.
VCR and Pi Capital continue to operate separately after their merger as they serve different markets (see evcj June 2002, p18) but iGabriel will be subsumed into Pi Capital. “By pure coincidence the investment strategy is almost identical, it’s an astonishing fit,” says Giampaolo. Pi Capital, whose members like those of iGabriel typically invest GBP100,000 a year, continues to conduct due diligence for its members, advise on transactions and assist with syndications. VCR operates as a source of screened investment opportunities for its 400 members who normally invest GBP30,00 a year. Giampaolo expects iGabriel’s members to contribute expertise in high tech investing to the group.
Etienne de Villiers, the ex-president of Walt Disney International Television, now senior partner of private equity fund Englefield Capital and a shareholder in iGabriel, will join the board of VCR/Pi, chaired by Simon Oliver, former chairman of Pi Capital. iGabriel will also be appointing one of its members to serve on the VCR/Pi investment committee.
Giampaolo says some more consolidation is possible and there is one other organisation that is of interest. “We have long believed that the best way forward for this market is through co-operation. By joining forces, both parties will substantially augment their placing power and access to deals of the highest quality. We feel extremely well positioned to assist our combined membership in taking advantage of one of the best times to invest in unquoted business for the past decade.” He says that although the current stock market crisis means some angels are investing less per deal, it has not prompted them to withdraw from private altogether: “Some investors actually feel more confident putting money into venture capital than the stock market at the moment.”
Ryan Prince and Charles Muirhead (the founder of Orchestream) launched iGabriel in 2000. Other members include Esther Dyson and Paul Myners. One of the companies funded by iGabriel is Nexagent, which recently raised GBP6.3 million from Atlas Venture, Benchmark Capital, Quester Capital, Lago Ventures and iGabriel to help develop network peering architecture and collaborative commerce platforms.