RALEIGH, N.C. – Having held a $40 million first close on Harbinger/Aurora Venture Fund L.L.C. in mid-October, partners at The Aurora Funds Inc. hope to raise a total of $100 million for the fund’s final close early next year.
With its first two funds, Aurora invested $18 million in seed and early-stage companies based primarily in the Southeast. The Harbinger Group Inc. is the alternative investment subsidiary of Harbert Management Corp., a Birmingham, Ala.-based asset management firm. In addition to the $10 million Harbinger is contributing to the fund, the merchant bank also will expand Aurora’s investment scope beyond the Research Triangle Park, N.C. area.
“We were interested in gaining a critical mass, and [now] have the ability to write bigger checks in the first round and have more dry powder for follow-ons,” said Aurora Partner Jeff Clark.
The fund will invest $3 million to $6 million over the life of its portfolio companies. Clark said the firm also will commit to seed-stage investments and incubation projects.
Clark manages Aurora with co-founder Scott Albert. The firm recently has placed associates in Washington D.C. and Birmingham to help invest the fund and intends to hire additional investment professionals.
All incumbent institutional investors, including Harbinger, Centura Bank, Silicon Valley Bank, NC Biotechnology Center and the NC Technological Authority Inc., ponied up for the new fund. First Union Investors Inc. and ALFA Investors are first-time investors in the fund. Clark expects the balance of the fund will be raised by first-time institutional investors or high-net-worth individuals who “can write a pretty big check.”
Like similar Aurora funds, the money will be spent on companies in the informational technology and life sciences industries, with a focus on IT. Although Clark would not provide figures for management fees and carried interest split, he said they conformed to traditional industry standards.
The fund recently made its first investment in Internet advertising service InternAdnet Inc.