Claremont Creek Ventures is among a handful of funds started in the past couple of years that that have tried to approach VC a little differently. For example, it is located in the industrial city of Oakland, Calif., where it looks for deals off the beaten path. And as many VCs are pursuing later stage deals, Claremont focuses on the very early stage, where it can stretch a small amount of capital with a lot of sweat equity.
Claremont, founded in June 2005, is also notable because the model it is pursuing has already born fruit: Last month, portfolio company PropertyBridge, which provides electronic payment services to the real estate management industry, was snapped up by MoneyGram International (NYSE: MGI). The sale price wasn’t disclosed, but Claremont says it made 5x its investment, with the potential for 7x if performance benchmarks are met. Not bad for the first invesment from the firm’s $130 million inaugural fund.
Editor Lawrence Aragon asked Claremont Managing Director John Steuart six quick questions:Just businessQ. Does the PropertyBridge deal validate your investment strategy?
A. Absolutely. Because this was a company that went through our Life Cycle Venturing process, it comes out of the East Bay, our backyard, and it demonstrates that small amounts of capital can generate large IRRs. You could argue that we just go lucky, but I think many will say, ‘Hey, these guys are onto something.’Q. What’s Life Cycle Venturing?
A. We were heavily operationally involved in the company. It got better not just because of our money but because of our help. A lot of times, that’s what entrepreneurs need. I went to trade shows with them, many of their meetings, got involved in their first lease and helped them think through the strategy. Q. Some say the venture model is broken. What’s your take?
A. Venture is a very big, heterogeneous, motley marketplace. I think there are terrific opportunities in venture; you just have to have the right strategy. For example, you can make five to 10 times your money on sub-$100 million acquisitions. There are lots of acquisitions in the $50 million to $100 million space, but by conventional venture yardsticks, those are not home runs.Just for funQ. The Beatles or The Stones? A. The BeatlesQ. Wine or beer?
A. BeerQ. What’s your favorite restaurant in Oakland (where Claremont is based)?
A. Ba Vo on 13th and Broadway. It’s a Vietnamese place. The best thing on the menu is No. 25: spicy onion and eggplant with prawns.