SEATTLE – Guide Ventures, a firm recently founded by a former partner in Redleaf Venture Management, notched a $10 million first close in early June for Guide Ventures II L.P.
The fund was launched early this year with a $25 million target and a $30 million cap, and founder Russ Aldrich said he envisioned reaching the latter figure rather quickly. A second and potentially final close is expected in the third quarter (VCJ, May, page 20).
The seed- and early-stage firm with a hands-on approach will concentrate on information technology and life sciences companies in the Pacific Northwest.
Deal-Sharing With Redleaf
Briefly known as Crossroad Ventures (VCJ, February, page 5), Guide was formed by Redleaf alumnus Russ Aldrich and angel investor Jim Thorton, and the new firm will maintain a deal-sharing relationship with the Saratoga, Calif.-based Redleaf. Because of his Redleaf connection, Mr. Aldrich has found himself in the unusual position of neither raising a first- or second-time fund, but something in between, he said.
Guide’s intense involvement in young portfolio companies resembles Redleaf’s strategy, and the first Redleaf fund, a $15 million vehicle, has proven that its approach can return money. Mr. Aldrich said he realizes the investment strategy requires not only money but also plenty of time from a partner and commented that Guide may never raise a $100 million fund but could remain in the $30 million to $60 million realm to maintain its hands-on approach. Mr. Aldrich knows, however, that by raising small funds, the firm will remain below the radar of many institutional investors.
About 60% of Guide II’s capital from the first close came from undisclosed institutions, funds-of-funds and family offices, and the remainder from individuals.