SAUSALITO, Calif. – Although it was founded last year as a start-up consulting firm, the partners at Artemis Ventures soon realized that most of their time was spent helping clients raise money. So, early this year, the firm raised its own seed-stage fund, which closed on $22 million in early May.
The firm originally helped business-to-business enterprise software and Internet start-ups handle the typical management problems that confront small businesses but soon found that helping clients raise money was its greatest strength.
“We said, We should probably raise a fund and finance these companies ourselves and share in the revenue we’re raising for them,'” said Kimball Atwood, a general partner of the firm.
The firm’s management team consists of Mr. Atwood, who has 15 years experience in senior management and strategic consulting for high-tech companies, and Christine Comaford, an entrepreneur who has worked as an engineer at Microsoft Corp., Lotus Development Corp. and Adobe Systems Inc.
Artemis quickly held a $10 million initial close in March and wrapped just two months later, backed by the firm’s network of “passive” angels investors who are interested in the seed-stage market.
“There’s a whole bunch of [individual investors] out there that don’t want to get too involved [in their own investments],” Mr. Atwood said. “Those were the ones we were targeting.”
The firm prefers to be a portfolio company’s first professional money, competing with angel investors in the $500,000 to $1 million range. Artemis will back two rounds of financing, putting up $1.5 million to $2 million per company. The lion’s share of the firm’s deals will originate in Silicon Valley.
Artemis also closed its first two deals in May: ELetter Inc., a San Jose, Calif.-based Internet-based service that facilitates direct mailings for small businesses, as part of a $3.5 million first round led by Trident Capital, and Again Technologies Inc., a San Mateo, Calif.-based developer of software that helps manage variable compensation plans.
The firm also will leverage relationships with the members of its advisory board, such as Softbank Chief Financial Officer Helen MacKenzie, former Intel Corp. executive Avram Miller, former Sun Microsystems Inc. and Time Warner Inc. Chief Information Officer Thanos Triant, Excite Inc. Senior Vice President of Sales Kenny Watchtel and Pets.com Chief Executive Julie Wainwright.