Fund briefs, February 2007

Santa Barbara firm starts fund-raising

Rincon Venture Capital, a Santa Barbara, Calif.-based early stage VC firm, is raising up to $80 million for its inaugural fund, according to a regulatory filing. The firm was co-founded by Jim Andelman, formerly a principal with Broadview Capital Partners, and Brian Kelly, co-founder of Eastern Development Corp. Rincon expects to invest between $500,000 and $1.5 million in a company’s first institutional round.

North Carolina firm raises second fund

Southern Capitol Ventures has raised a second fund of $15.1 million. The Raleigh, N.C.-based firm backs technology and life sciences startups in the Southeast and Mid-Atlantic regions. Among the investors in the new fund are E. Stephen Stroud, chairman of NAI Carolantic Realty; Tom Darden, CEO of Cherokee Investment Partners; and Jim Goodmon, CEO of Capitol Broadcasting.

Southern Capitol‘s team is made up of founding Partner Ben Brooks and General Partners Jason Caplain and Dave Murray. The firm’s website lists seven portfolio companies, including, an online art retailer.

Southern Capitol’s first raised $5 million and has seen one exit—the sale of Synthematix Inc. two years ago for $15 million.

ProQuest raises $425M

ProQuest Investments has closed its fourth fund with $425 million in capital commitments. The firm invests in seed and late stage health care deals and has offices in Princeton, N.J., San Diego and Montreal. ProQuest raised $200 million for its third fund in 2004.

Mellon finalizes venture unit sale

Mellon Financial Corp. has completed a substantial portion of the sale of its ownership interests in the direct and indirect portfolios of its venture capital unit, Mellon Ventures, to Goldman Sachs Private Investments Ltd. and New MVI LP. One or more subsequent closings will occur during the first quarter of 2007 once remaining consents to the transfer are obtained.

Based on this transaction, the financial results from Mellon’s venture portfolio will be classified as discontinued operations as of the fourth quarter of 2006. The disposal of the portfolio and related costs are expected to generate an after-tax loss of about $70 million.

Dawntreader sets sights on $250M

Dawntreader Ventures is targeting $250 million for its third early stage fund. The New York-based firm, which was formerly known as Soundview Ventures, raised the same amount for its second fund in 2000. Exits from fund II include MortgageIT, which went public, Moreover Technologies, which was acquired by VeriSign, InterSAN, which was acquired by Finisar, and Colloquis, which was acquired by Microsoft.

Borealis aims for $50M

Borealis Ventures is raising up to $50 million for its second fund, according to a regulatory filing. The Hanover, N.H.-based firm focuses on early stage opportunities in Northern New England and the Dartmouth College network. The firm raised $20 million for its inaugural fund in 2000. Borealis invests in software, Internet services and technology commercialization with an investment range of between $1 million and $4 million in a company’s first round. —VCJ staff