Poland Gets First Independent VC Fund –

WARSAW, Poland – Two former members of Renaissance Capital’s Polish investment team have formed Spring, an independent venture management group that is marketing Spring Capital, a $55 million Poland fund. If Spring reaches a successful closing, it will be the first Polish fund raised by an independent local team without a Western partner or institutional sponsor.

Jacek Witak and his colleague Jacek Klos decided to go it alone last autumn after ABN AMRO announced its intention to take over the Renaissance Capital management group. While Renaissance Capital has a regional focus, the first Spring fund will focus exclusively on Poland. “It was not a hostile separation, but we took a different view [from Renaissance] concerning investment opportunities in Eastern Europe over the next three to four years,” Mr. Witak said. Compared to neighboring countries, Poland has a strong economy, a stable political climate and a private equity market that, although young, has already shown itself to be efficient by generating a number of successful exits.

Spring Capital will target the sub-$5 million segment of the market, and the fund will adopt an opportunistic approach because the Polish economy is not yet sufficiently developed to support a sector-specific fund. Mr. Witak predicted, however, that much of Spring’s deal flow will emanate from the nascent services sector, the software and information technology services industry and branded goods businesses.

Approximately three-fourths of the fund will be deployed in development-stage investments, which Spring defines as companies with a four- to six-year realization horizon, while the balance will be available to fund start-ups. Summarizing Spring’s strategy, Mr. Witak said, “We are open to entrepreneurial, but not to technical risk.”

Subject to formal board approval, the European Bank for Reconstruction and Development, which was a key investor in European Renaissance Capital, will commit 20% of Spring Capital’s target. The new fund has also attracted support from Frank Bonsal, the founding partner of New Enterprise Associates, and Pitch Johnson, one of Renaissance’s founders.

Mr. Witak reported that Spring currently is talking to one United Kingdom and two United States-based funds-of-funds and hopes to close the vehicle in April.

Spring’s founders have selected three additional investment executives who will join the firm following the fund’s closing.