PHILADELPHIA – Keystone Venture Capital expects an early winter second close on capital from existing limited partners for its sixth fund, the $200 million-targeted Keystone Venture VI LP, said General Partner Peter Ligeti.
The firm held a first close on the fund in June, confirming $18 million in commitments also from some of its existing investors, Ligeti said. The firm expects to hold a final close next summer after it broadens its investor base with some newcomers, he said.
Keystone will back about 25 to 30 information technology companies, specifically in the wireless, tools, e-commerce and affinity marketing spaces. The firm will target early expansion-stage companies with initial investments between $2 million and $8 million, Ligeti said. Half of the firm’s investments will likely be in the Mid-Atlantic region, while the remaining capital will go to companies in New England, the Midwest and other scattered locations throughout the U.S., Ligeti said.
The firm takes board seats a majority of the time and usually leads or co-leads its deals, he said. Keystone often co-invests with Apex Investment Partners, Mid-Atlantic Venture Funds and ABS Capital Partners.
The firm’s previous fund, the $102 million Keystone Venture V LP, which held a final close in the fall of 1999, has backed about 25 companies. At press time, about $80 million of the fund had been invested with the remaining capital reserved for follow-on investments, Ligeti said.
The firm’s portfolio includes L90 Inc., a Santa Monica, Calif.-based creator of online marketing and advertising campaigns, which went public in January, and i3 Mobile Inc., the Stamford, Conn.-based distributor of customized information to cellular phones, which went public in April.
Keystone’s existing LPs include Pennsylvania State Employees’ Retirement System, Dime Savings Bank, Citizens Bank, Silicon Valley Bank and Imperial Bank, as well as some high-net-worth individuals. The firm retains an 80%/20% carried interest split and “pretty standard” management fee, although Ligiti refrained from revealing the exact amount.
The firm opened an office in Northern Virginia in August and uses it as a home base when conducting business in the area. As fund raising continues, the firm plans to hire someone who will be based in the new office, and will also be in the market for another investor in Philadelphia, Ligeti said.
Founded in 1983, the Keystone investment team consists of Ligeti, Kerry Dale, John Regan, Robert Pace and Atul Madahar.