BOSTON – Michael Balmuth, a principal at Summit Partners, recently moved over as general partner to the Summit Accelerator Fund, as the early-stage vehicle reached its first close.
Balmuth had spent three years at the late-stage focused Summit Partners and will now work full time generating deals for the new fund. He will continue to maintain board seats on several portfolio companies, slowly easing himself out of his former responsibilities.
The technology-focused Summit Accelerator was launched in late spring when Summit Partners brought in Kip Sheeline from Hambrecht & Quist to manage the vehicle, which taps smaller deals than the late-stage Summit Partners (VCJ, June, page 5). Summit Accelerator aims to raise $150 million to pursue deals of about $5 million each in technology and technology services companies. By comparison, Summit Partners makes individual investments of $10 million to $100 million, and Summit Partners’ latest fund totaled $1.1 billion, closing in March 1998.
Sheeline will be based in Palo Alto, Calif., but Balmuth will remain in Boston so the two can scout deals on both coasts. Summit Accelerator is in the market for one more general partner to help manage the fund, and Sheeline said he has been talking to a number of very qualified candidates.
Summit Partners’ L.P.s were eager to invest in the new vehicle, leaving Summit Accelerator over-subscribed, Sheeline said. The fund notched a first close on about $120 million in mid-August and expects to wrap on about $160 million in early October.
Backers include the General Motors Investment Management Corp., Yale University, Brinson Partners Inc. and the Virginia Retirement System, Sheeline said.
Before joining Summit, Balmuth worked at Broadview Associates L.L.C., advising late-stage companies in digital media. He also has held several positions at IBM Corp., in systems engineering, marketing and corporate development.
“For me, it’s an evolutionary step in my career,” Balmuth said of his transition from Summit Partners to Summit Accelerator Fund, noting that there was a certain excitement about working with “younger, nimbler slightly less developed companies.”
Many of Balmuth’s responsibilities at Summit Accelerator will be familiar, but this is the first time he has worked for a new enterprise, he noted. While the fund benefits from Summit’s brand name and support, the vehicle is independent and in some ways resembles a first-time fund, he said. As a semi-spin-off, the general partners for Summit Accelerator will run the fund with some help from Summit. There is also the possibility that Summit could help fund Summit Accelerator companies once they mature.