CHICAGO – Veteran venture capitalist and entrepreneur Len Batterson has been busy launching an institutional venture fund and creating an online resource for VCs.
Mr. Batterson, a former director of Allstate Insurance Co.’s venture capital division, is president and chief executive of Batterson Venture Partners, a private venture firm that until now has worked with an informal network of some 80 high-net-worth angel investors. The firm has turned to raising an institutional fund, and the new $100 million Batterson Technology Venture Partners plans to tap large public pensions, foundations and corporations to invest in high-technology companies nationwide. Mr. Batterson expects the vehicle to hold a first close in the next several months.
The institutional fund will commit to a balanced mix of early- and late-stage companies and co-invest with the angel network, which already has backed one of Mr. Batterson’s other projects. The group invested $250,000 of a $1.2 million round of seed capital in Venture Capital Online, a company that operates a Web site to streamline the front-end of the venture investment process.
Venture Capital Online (www.vcapital.com), founded by Mr. Batterson in September 1998, matches entrepreneurs seeking venture capital to the appropriate firms. A network of 26 venture firms – including Primus Venture Partners, Technology Funding, UPS Strategic Enterprise Fund and Hambrecht & Quist Venture Capital – has registered investment criteria with Venture Capital Online, which in turn provides weekly e-mail summaries of investment opportunities in various sectors. Entrepreneurs are required to pay a fee only if one of the network’s VCs requests full copies of their business plans. Participating venture firms, who now use the service for free, eventually will pay a flat annual fee.
“We’re one of the few venture capital-backed companies focusing on this industry,” said Fritz Jordan, a co-founder, president and chief operating officer of Venture Capital Online and a venture manager of Batterson Technology Venture Partners. While VCs have financed innovation in virtually every other industry, they have done little to bring their own businesses into the technological age, Mr. Jordan added.
Venture Capital Online must sign several more firms onto its beta test program before fully launching its service sometime in the next six months. At that time, Mr. Batterson estimated, the company will seek approximately $10 million in venture financing, likely to be drawn from the venture firms that use the company’s services.
“We’ve already started talking to them about it, and there’s been quite a bit of interest,” Mr. Batterson said. Batterson Technology Venture Partners probably will not invest in Venture Capital Online because Mr. Batterson has a financial stake in each enterprise.
Venture Capital Online is led by co-founders Messrs. Batterson and Jordan, Vice President of Operations Ben Vitale, Vice President of Business Development Dave Staer and Director of Marketing Ellen Broadbine.