1) Larry, you engineered a spin-out from Mellon Ventures with backing from the secondary group at Goldman Sachs. The firm also supplied you with a $125 million primary fund with which to make new equity investments of $10 million to $30 million in growth equity and buyout deals. Where are you in the fundraising cycle? We closed Dec. 29 2006 and spent about 18 months rationalizing the secondary fund, selling off assets. We’ve sold roughly half the fund and returned all the money spent by Goldman Sachs. We have eight fairly significant positions left. We expect Goldman Sachs to earn at least a double. Of the $125 million primary fund we’re one deal away from being done. We’re certainly in a position where a typical fund would be raising money. Our current investment rate would dictate a $250 million fund.

2) Digital media is one of four main focuses for the firm. How do you define this market? The category that we address is really a complement to a traditional ad agency. It’s the interactive, Internet-oriented digital piece of the equation. It would encompass everything from email to social media to banner ads to Web sites to microsites, as well as defining and developing a brand strategy utilizing those tools. All the traditional agencies will be focused on digital over the next 10 years.

3) Where do you see the biggest opportunities in this market? What we’re most excited about are the digital media firms serving challenger brands, defined as no. 2 to no. 5 in their categories. Those are the consumer product companies that need the most assistance in developing a cohesive brand strategy.

4) What is one of your favorite portfolio companies in digital media, and what does the company do? The best pure play example is a marketing agency called Definitions 6. We invested in it in June 2009. In august 2009 we acquired and folded in a New York agency called Creative Bubble, which was particulary strong in rich media (video). That was a capability that Definitions 6 regularly deployed but had to use a subcontractor for. That doubled the size of the business. We also added a traditional PR firm, also based in NY, a few months after that. When we invested in Definitions 6, the CEO was the primary sales guy for the organization. The company now has a senior VP of sales and 11 sales people.

5) What has to happen before we can expect to see an exit from Definitions 6? We’re still on the high-growth trajectory, and until we get close to $100 million in revenue we’re really just focused on quality and quantity of products and service. The run rate for 2011 is anticipated north of $30 million. We pretty much tripled in revenue over the last 18 months. So if we triple again, we will be there in 18 months. We’ve gone from 50 to 150 employees, and only 50 of those came through the acquisition of Creative Bubble.