CINCINNATI – Founded in 1994, River Cities Capital Funds primarily invests in early- to expansion-stage Internet, software, health-care, telecommunications, manufacturing and services companies, mostly in the Midwest and Southeastern United States.
Some 20% of River Cities Capital Fund II, which closed on $100 million in August 1998, already is invested, said Murray Wilson, a principal at the firm. River Cities expects tits latest vehicle to back some 25 to 30 companies, with investments ranging between $1 million and $6 million, sometimes over several rounds of financing. River Cities leads about half of its deals and avoids being the sole investor.
At press time, Fund II had invested in 11 companies, six of which the firm had backed with its first fund. Fund II is expected to be fully invested in three years, Wilson said.
River Cities closed on the $45 million River Cities Capital Fund I in August 1994, investing an average of $2 million each in 22 companies. The vehicle was completely invested or committed at the beginning of this year, and one of the firm’s portfolio companies, High Speed Access Corp., a provider of high-speed Internet access to Cable TV providers, went public in June.
Some 80% of River Cities’ limited partners are high-net-worth individuals and the remaining 20% are institutional investors. Virtually all existing L.P.s, many of whom increased their investment, returned for Fund II, and they were joined by some newcomers. The fund is leveraged two-to-one with capital from the Small Business Administration through its Small Business Investment Company program.
The firm’s two general partners are Glen Mayfield and Ted Robinson. Eric Lenning, Rick Kieser and Wilson are the firm’s three principals.
Following are some of River Cities Capital Funds portfolio companies:
CMHC Systems (Dublin, Ohio) provides information technology to public and behavioral health-care providers.
FINOVA was a co-investor.
Darwin Networks (Louisville, Ky.) provides turnkey broadband Internet access systems to local exchange carriers and multi-tenant building owners.
Vulcan Ventures, Chrysalis Ventures, Richland Ventures and Moore & Associates were co-investors.
DPEC Inc. (Columbus, Ohio) provides Web-based computer training to corporations and individuals.
Chrysalis Ventures was a co-investor.
High Speed Access Corp. (Louisville, Ky.) provides turnkey broadband Internet access systems for Cable TV operators.
Vulcan Ventures and Chrysalis Ventures were co-investors.
Hill Top Research Inc. (Cincinnati) conducts clinical research for consumer product and pharmaceutical companies.
Accel Partners and Greylock Management Corp. were co-investors.
IntelliSeek Inc. (Cincinnati) provides software solutions and services that enable users to gather and manage digital information distributed on the Internet and across corporate intranets.
Nokia Venture and Chrysalis Ventures were co-investors.
The Jay Industrial Technologies Group (Cincinnati) provides products and services for the process and power generation industries.
Blue Chip Venture Co. was a co-investor.
KatchAll Industries International Inc. (Cincinnati) designs, manufactures and markets specialty restaurant equipment, placing an emphasis on food safety.
Blue Chip Venture Co. was a co-investor.
Regent Communications Inc. (Covington, Ky.) acquires and operates AM and FM radio stations in middle markets.
GE Capital Equity Capital Group was a co-investor.
Technology Builders Inc. (Atlanta) provides Internet design, hosting and marketing services to organizations.
Cordova Capital was a co-investor.
TRANSMAP Corp. (Columbus, Ohio) provides applications databases and services for the geographic information systems market.
White Pines Management was a co-investor.
Varis Corp. (Mason, Ohio) designs, manufactures and markets variable, high-speed digital electronic print controllers.
CID Equity Partners was a co-investor.
River Cities Capital Fund is located at 221 East Fourth Street, Suite 2250, Cincinnati, Ohio, 45202, tel: (513) 621-9700, fax: (513) 579-8939. The firm’s Web site may be found at www.rccf.com.