SEWICKLEY, Pa. – Adams Capital Management Inc. recently added Anthony Warren, managing partner of Strategic Technologies LLC, as a venture partner to increase ACM’s deal flow, said Joel Adams, the firm’s general partner. Warren is Adam’s first venture partner.
ACM, which focuses on seed and first stage telecom and information technology deals, is looking to expand its market coverage, Adams said. “Tony gives us access to a part of the small business technology market we are not very deep in,” Adams added.
The firm was attracted to Warren because of his involvement with the federal government’s Small Business Innovation and Research program (“SBIR”), which provides funding to small companies’ research and development programs. Warren explained that he knew the founder of the SBIR program and has been a speaker at various SBIR events and has helped the program and the people who run it from time to time. “I have basically worked as a pro-bono advisor, teacher and lecturer for the program,” he added.
Warren and ACM were also very familiar with one another, having done deals together and referred deals to one another in the past when Warren was president and chief operating officer of Technology Management & Funding, a seed-stage technology fund that he co-founded in 1992. Warren founded the Princeton, N.J.-based Strategic Technologies in 1999.
At Strategic Technologies, Warren aids entrepreneurs who are developing new technologies in completing transactions based on their innovations. “Most of the time the technology is very good, but its not enough for a company – so we help the entrepreneurs transact on, sell or license what they are developing,” he said. “We take a small retainer and a percentage of the transaction as a fee.”
However, Strategic Technologies occasionally uncovers an idea that seems to have potential as a company in its own right, Warren noted. Now, he will bring these companies to ACM as candidates for funding. Warren said he expects to bring at least one potential deal to ACM per month, with the firm investing in three to four of these deals per year. “This gives us a chance to share in the equity upside of a deal without having to have our own fund. I can find good tech deals in this area. Currently this small business field is going to waste,” Warren said.
As a venture partner, Warren will sit on ACM’s advisory board and will have the opportunity to co-invest in the opportunities he brings to the firm. ACM will continue to add venture partners over the next several months, with the number of venture partners eventually growing as high as five, Adams said. “In 1997 we had two general partners; now we have five. We are growing, and we are always looking to keep things vibrant,” he noted.
ACM is currently investing its $150 million Adams Capital Management II fund, which closed in December 1999. The vehicle has already backed four deals for a total of $11 million and Adams said several more deals are currently in the firm’s pipeline. Typical deal size, including follow-on investments, should range from $8 million to $10 million, he added. Adams also anticipated that ACM will launch fund raising for its third vehicle, which is likely to have a $300 million target, sometime at the end of this year.