Odeon Signs Joint Venture, Preps $230M Fund II –

NEW YORK – Early-stage investor Odeon Capital Partners and executive search firm Christian & Timbers recently announced a joint venture that will become effective upon the closing of Odeon’s $230 million second venture fund.

Under the terms of the agreement, C&T will staff all of Odeon’s portfolio companies, and the two will create an incubator that Greg Selker, C&T managing director and head of the firm’s technology and venture practice, described as “an integrated model of professional consulting services.”

Furthermore, Odeon and C&T will create a holding company, with a chairman, chief executive and managing directors in recruitment, business development, finance and marketing. The holding company will be a superstructure over six or seven similar, vertical structures – the incubators themselves – that will be divided by industry sector. These sectors will include financial services, health care and life sciences, supply chain infrastructure and wireless technology.

“We’re creating a model of processes to put people though, and a model of sensors for people to see whether they’re on or off where they need to be,” Selker said.

An interim chief executive officer has been named to the holding company, while a search is still being conducted, and Selker said two-thirds of the industry-specific CEOs have also been named. The entire team will be announced over the summer.

Odeon and C&T will raise between $20 million and $50 million from unnamed global partners to fund the incubator.

“The global partners are putting money into each vertical, and will act as a conduit for talent and/or technology at the corporate level so there’s no talent drain,” Selker said.

Although C&T will not have a carry in the new fund, it will be a significant equity holder in the incubator and will hold equity stakes in all the portfolio companies for which it performs executive searches.

In its second fund, Odeon will continue to make $4 million to $7 million commitments through the life of the portfolio companies, with initial investment in first rounds of institutional financing, said Odeon Managing Partner Jeff Finkle. It will also maintain its focus on application service providers, e-commerce plays, professional services and Web infrastructure, including community platforms as well as networking and telecom providers. Finkle, however, would not comment on how much of the fundraising has been completed or when the fund would close.

C&T and Odeon first announced a partnership in July 1999, when C&T agreed to a preferred relationship with the venture firm. Not only did C&T recruit management teams for the portfolio companies in Odeon’s $115 million first fund, but it also performed part of Odeon’s due diligence, pre-assessing management teams and technologies, and the search firm became a limited partner in the fund.

Negotiations toward a closer relationship between C&T and Odeon began later in the fall.

“This is a closer marriage between the search firms and the VCs, where C&T is going to win and Odeon is going to win,” Selker said.

Selker will head a team of five executive recruiters splitting their time between New York-based Odeon and Cleveland-based C&T, with access to all of the search firm’s research and database services. The team will bring administrative support to the project and leverage all of C&T’s professionals as needed.