Marlinspike Partners, which has hefty governmental and investment experience, is raising its debut fund for investments in dual-use technology, or products usable by the government and the private industry, sources told Buyouts.
The firm is among numerous first-time managers in the market seeking to attract capital despite the challenges of the current fundraising environment. Concerns about the wider economy, as well as a crowded fundraising market, have made it tough for first-timers to catch the attention of limited partners.
Still, as Buyouts has extensively reported on a dedicated page to emerging managers, (visit it here!), many GPs are trying – some successfully – to translate the story of their firm into pledges from new investors.
Marlinspike Partners was formed in 2020 by Neil Keegan, chief executive and co-managing partner, and Mislav Tolusic, co-managing partner, along with minority owner Mark Powell. Marlinspike was formed to invest in what it calls “dual-use” technology that has government and private industry applications across AI, analytics, autonomy and robotics, the space economy and cyber.
“Escalating great power competition with China and Russia will drive massive American investment, innovation and scaling of new technologies,” the firm said in marketing material seen by Buyouts.
The firm made a series of deal-by-deal investments before launching Marlinspike Disruptive Technology Fund I in January.
The firm quickly held a first close in January and has raised more than $25 million so far, sources said. At this point, it is about 32 percent deployed across three investments: Voyager Space, a space infrastructure company; Privateer Space, co-founded by Apple co-founder Steve Wozniak, which focuses on tracking, monitoring and navigation of space debris; and drone delivery company Elroy Air.
Several first-time funds have used the strategy of investing while fundraising, adding early deals to the fund as a way of eliminating some of the blind-pool risk for LPs who commit later. New LPs to Marlinspike’s fund can commit at the initial cost basis of the investments (even if they’ve been written up), with a catch-up fee, the source said.
Fund I has a seven year term, four-year investment period as well as a 2 percent management fee and 20 percent carried interest rate, sources said. The pool also will charge a 1 percent management fee and 10 percent carry on co-investments, they said.
Its investment split likely will be around 60-70 percent in Series A and B-level companies, 20-25 percent growth stage and the remaining portion in seed stage investments, the source said.
The firm’s pipeline of opportunities is robust, according to a Q1 investor letter. “We sourced 90 opportunities in Q1, and our plan for the year calls for sourcing and evaluating between 200 and 250 companies.”
Prior to launching Marlinspike, Keegan ran a single family office called Roanoke Capital Management starting in 2009, according to his LinkedIn profile. He also spent six years at Goldman Sachs early in his career, and served in the US Navy.
Tolusic previously was a partner at Crumpton Ventures starting in 2008, before which he worked at Highland Capital Management, his LinkedIn profile notes.
Other executives at Marlinspike include Powell, chief strategy officer; Chip Walter, a US Navy and intelligence veteran who previously worked for Northrop Grumman’s venture capital arm; and John Mastal, who leads capital markets.