Transitions: Digital Coast Taps Heymann, Hits $34M Mark –

LOS ANGELES – Digital Coast Ventures Corp. has hired Thomas Heymann to be the firm’s first managing director, said Chairman James Montgomery. The nascent investment company also held a $34 million second close in late June on its $40 million-targeted freshman vehicle, Digital Coast Ventures LLC. Montgomery and his brother Michael launched fund raising for the vehicle in December 1999.

Digital Coast Ventures, an affiliate of Santa Monica, Calif.-based merchant bank Digital Coast Partners, which was also founded by Montgomery, will back seed- to early-stage wireless, digital media infrastructure, broadband and e-commerce infrastructure companies. The firm will focus on companies in Southern California, mainly from Santa Barbara to San Diego.

Previously Heymann was chief executive officer and chairman of GT Interactive Software, where he oversaw a reorganization and recapitalization of the company. Prior to that, he worked for eight years at The Walt Disney Co. as president of the The Disney Stores Inc. As the head of the Disney Stores, Heymann grew the organization from 69 locations in the U.S. and Canada to over 679 stores in 11 countries.

Montgomery said Heymann’s operational experience made him a natural choice to be Digital Coast Venture’s first managing director. “Lots of venture capital firms are hiring chief operating officers now to work with their portfolio companies, we won’t need that because Tom already understands how to operate a company. He is more than a typical deal guy,” he said.

Heymann said his first order of business will be helping to put together the rest of Digital Coast Ventures’ team, which he thinks will eventually number between 10 and 12 investment, strategy and financial professionals. Beyond that, he said his responsibilities would center on seeking to finding investment opportunities, assembling management teams, working on business models and mapping out strategies for Digital Coast Venture’s portfolio companies.

Heymann said he made the decision to jump to VC because of his desire to participate in the New Economy. “I evaluated a lot of positions including CEO jobs at some companies, but what seemed really exciting to me is being involved in a number of companies and a number of industries,” he added. “I am really excited about this opportunity, and I’ve always had an ambition to be a life-long learner, so this should allow me to keep learning, too.”

The vehicle, which was initially targeted to reach $20 million, will make investments ranging from $250,000 to $2 million. Heymann said the fund should back about 15 to 20 companies. Limited partners investing in the fund include high-net-worth individuals from the technology, communications and entertainment industries, as well as institutional investors, including TMCT II LLC and SunAmerica, a member of American International Group Inc.

Montgomery said he plans on adding two additional managing directors to Digital Coast Venture’s staff over the next few months. One of the new managing directors should have a background in technology, while the other will likely come from the financial world, he added.