BELLVUE, Wash. – Encompass Ventures expects a first close in June on EV II Partnership, raised from Japanese operating companies, and the firm is contemplating raising another fund targeting institutions in the United States (VCJ, February, page 12).
Encompass, which intends to raise $30 million for EV II, at press time expected the first close to notch $15 million to $20 million, said Managing Director Wayne Wager.
The vehicle will back early- to mezzanine-stage information technology companies, including medical-IT deals, mostly in the Pacific Northwest. The firm, however, is excluding biotech and medical devices. “Anything that walks on its own or has juice we don’t do,” explained Mr. Wager.
The group prefers to lead deals in its own region, making average investments of about $2 million to $3 million each. Encompass offers its contacts in Japan to other VCs when trying to get into their Silicon Valley deals.
Scot Land and Mr. Wager are the firm’s managing directors, and they plan to add another managing director if Encompass proceeds with plans to raise a more traditional U.S. institutionally backed fund, Mr. Wager said.
Encompass will decide in the second half of this year whether to go forward with a U.S. fund, which would co-invest with EV II. A target size has not been set, but Mr. Wager said it likely would be around $100 million.
Mr. Wager declined to name limited partners in the Japanese fund, other than to acknowledge that Encompass’ original backers, Nikkos Securities and Trans Cosmos, are investors (VCJ, July 1997, page 8). The vehicle features an 80%/20% carried interest split and a 2.5% management fee.