New Jersey Technology Council?s debut venture fund, NJTC Ventures I, is nearing the home stretch of its fund-raising efforts. Linked to Mt. Laurel, N.J.-based NJTC, a corporate advocacy group whose 1,300 members include the state?s technology, banking and pharmaceutical heavyweights, and expected to leverage the group?s membership into investment opportunities, the fund currently is capitalized at $35 million. Still, it will continue to accept subscriptions until its final close, slated for December 11.
“The NJTC was a logical foundation to create an early-stage fund from because they generate a high volume of deals, participate in the investment diligence and the evaluation diligence, and after a deal is made, the network is wonderful and you have a list of logical acquirers for the portfolio companies,” said Jim Gunton, general partner with the fund.
Indeed, limited partners in the fund include a mixed bag of institutional and individual investors, including Commerce Bank, Kemper Insurance Cos., Silicon Valley Bank, and Dendrite International Inc., as well as local executives from Lucent Technologies, Enzon Inc. and Sarnoff Corp.
The fund?s management team, too, has long-standing ties to the state?s venture community.
After 10 years in Silicon Valley, including a stint at Oracle Corp. as a product line manager for the company?s application software lines, Gunton spent seven years at Edison Venture Fund, a Lawrenceville, N.J.-based firm with $238.5 million under management before joining NJTC Ventures. At Edison he specialized in software and technology-related opportunities, and led investments in Rocky Hill, Conn.-based security software provider Mergent International Inc., acquired by Utimaco in 1996 at an undisclosed price, and PCS One, an Atlantic City, N.J.-based provider of mobile and portable radio services, acquired in 1997.
Joe Falkenstein, the fund?s second general partner, was a Cherry Hill, N.J.-based partner in Arthur Anderson?s emerging businesses practice, advising early-stage companies in accounting and audit practices and helping them get acquainted with VC firms. Maxine Ballen, NJTC?s founder and president, is a principal in the fund. Rounding out the team is Sam Ault, who serves as an analyst for the fund.
Together, the team will scout early-stage investments in the state?s telecommunications, pharmaceutical and financial service industries, making investments that average between $300,000 and $2 million.
Following a first close last December, the fund made its first investment in January of this year with a $500,000 private equity stake in Somerset, N.J.?s Netilla Networks? $6.5 million Series A round. Netilla is a provider of virtual private networks. That deal was followed with a $400,000 slice of Summit, N.J.?s Teltier Technologies? $6 million Series
A round of financing. A Lucent Technologies Inc. spinoff, Teltier is a mobile network infrastructure company. In July, the fund invested $250,000 in Incurrent Solutions? $4.5 million round of Series B financing. The Parsippany, N.J., company provides Internet-based CRM solutions for the credit card industry.
The firm?s current deal pipeline may include investments in a drug discovery company with ties to Princeton University and another firm whose founder already has created and sold two fiber optic companies. When fully invested, the fund?s portfolio is expected to include up to 20 young companies.
Additionally, the fund plans to take a significant minority stake in each portfolio company of up to 40%.
Contact Carolina Braunschweig: Carolina.Braunschweig@tfn.com
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