Spun out of Raleigh, N.C.-based Marion Bass Securities as an independent venture firm earlier this year, Southern Capitol Ventures expects to hold a $20 million final close on its debut fund within the next 30 days.
Weighted heavily toward investments in early-stage biotechnology and information technology companies, most of the Research Triangle Park, N.C.-based fund’s investment capital will be provided by local angel groups and larger venture funds looking for an early eye into these sectors. Already the fund has received a $100,000 commitment from North Carolina Biotechnology Center, a state-sponsored initiative to develop the region’s biotechnology industry. All potential limited partners, however, have signed non-disclosure agreements with Southern Capitol and won’t be revealed until the fund’s final close.
Southern Capitol will make investments only in companies with post-money valuations of $3 million and higher – taking home 25% of the equity and demanding observer rights on the portfolio company’s board. Approximately 60% of the fund’s investments will be dedicated to information technology and the remaining 40% in genomics and bio-informatics tools. Investments will stretch along the Southeastern corridor between Central Florida and Washington, D.C., but will be concentrated in the Research Triangle Park area of North Carolina, said Ben Brooks, the firm’s managing director. Brooks is the former director of investment banking at Marion Brooks.
According to our VentureXpert database, Southern Capitol’s targeted geographic region last year raked in $1.15 billion of venture capital investment for 87 private companies. Biotechnology-related investments accounted for $65.93 million of that total, while investments in information technology accounted for another $883.96 million. Two biotechnology-related companies in the region so far this year – Icagen Inc. and Triangle Pharmaceuticals Inc. – have scored $36 million from private equity investors. Eighteen companies in the information technology sector received an additional $233.10 million from venture capitalists this year. Investors like Abbott Laboratories, J.P. Morgan Partners and Venrock Associates have been heavy participants.
To date, Southern Capitol has made one direct investment and four investments though its $1 million stake in The Atlantis Group, a local member-managed seed-stage investment group. The firm also has secured an alliance with TruePilot, a year-old angel group active in the Research Triangle Park area. In March, Southern Capitol committed $250,000 to FullSeven Technologies Inc., a Research Triangle Park provider of branded e-mail services, following an $800,000 seed round led by TruePilot in October.