MILPITAS, Calif. – In an effort to expand its markets, Quantum Corp., a leading information storage technology company, in late March launched QTV as its venture capital arm, said Jim Schraith, president of QTV.
The $100 million QTV will back companies developing storage-related technologies, products/services and storage intensive applications, like digital video recorders, Schraith said, adding that Quantum hopes to benefit from both the technologies being developed by its portfolio companies, as well as profit from the equity stake it holds in these companies.
“This is a great way for Quantum to augment its research and development activities and market development efforts. Couple this with all the activity that is going on right now and we thought it best to make a full court press and launch the fund, rather than simply invest haphazardly or on an ad hoc basis,” he added.
The fund will back approximately 18 to 25 companies with an average deal size of between $1 million to $5 million over a few rounds of financing, he noted. Schraith said he expects that QTV will be fully invested in about 18 months.
The vehicle does not have a specific stage focus; but Schraith said the deal flow to date has been mostly comprised of early-to-middle stage companies. He expected the fund to invest predominantly in Silicon Valley-based companies, but about 30% of the capital could be invested overseas.
“Where we invest is not a huge concern. We are more concerned with the opportunity and the strategic fit a company has with Quantum’s overall goal,” he said.
The vehicle will have a management fee in the 2% to 2.5% range, and its carried interest structure will fall under standard industry levels. QTV has already made one in investment in StoragePoint.com, a provider of virtual storage and information access management and has several more candidates in the pipeline, he said.
If the fund is successful, Schraith said, QTV should receive additional investments either from Quantum or new limited partners at some point in the future. The investment team consists of Schraith, and Steve Schlossareck, vice-president. QTV has plans to add another investment professional sometime during April.
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