GoldenEye International Shakes and Stirs VC Market

Four years in the making, it will be at least another four before venture outfit GoldenEye International Inc. realizes its business plan.

On the heels of a $6.1 million seed round, the New York-based firm is in the market for a $20 million Series A deal to finance both an operating unit and the first close on its $75 million GoldenEye Opportunity Fund. Once both the business and the early-stage venture fund are up and running, and at least one initial public offering is in the pipeline, GoldenEye hopes to go public and offer its shareholders a stake in its portfolio firms’ IPOs.

“When you sit with a tricky, troubled market, everything is different and closed for us right now,” said GoldenEye Chairman and Chief Executive Harold Mintz. “It’s fine. It’s a neat time for us to build a business.”

Today, GoldenEye is expected to announce that it has raised its seed financing from 74 individual investors. The firm expects to close on another $5 million of venture financing by Jan. 15 – the first tranche of a $20 million institutional deal. The $75 million fund will hold a final close in the second half of 2001. Once it has raised $5 million of institutional money, it can begin funding start-ups through its investment vehicle.

Galileo Professional Services of New York is acting as placement agent on the deal.

GoldenEye plans to raise and support at least one venture fund, getting into deals early enough to demand rights in a portfolio company’s IPO. Then, once GoldenEye itself goes public, it will distribute the IPO shares to its own base of shareholders, and open both the lucrative venture market and the IPO market to a larger base of investors.

While this is a model that seems to echo the plans of meVC or ICG, Mintz argues that his can sort through the clutter of failed ventures and succeed in the public markets.

“We’ll provide access to more people and preserve the basic strengths of a good venture capital fund, but do it from an integrated enterprise perspective with back-office support and branding, but have a separate fund,” he said. “The funds will be managed by the best and brightest, but supported by GoldenEye.”

To date, GoldenEye has ventured into four start-ups, taking a 7% post-money stake in each one. It committed $1 million to both fiber optic interconnect systems manufacturer Page Automated Telecommunications Systems Inc. and PrimeCloud Inc., which has developed an Internet-enabling personalization solution that targets mid-market Microsoft-centric e-commerce sites.

GoldenEye has also taken a $500,000 piece of Inc., a Web content and commerce site targeting the mind-body-spirit market, and put $300,000 into Satellite Marketing, an applications service provider for marketing.

Until GoldenEye completes its Series A financing, it will likely keep any future investments under $500,000 and will target early-stage plays in the telecommunications, enterprise software, optical networking, wireless and collaborated commerce spaces.

Carolina Braunschweig can be contacted at Story Feedback