ALBANY, N.Y. – Newly-formed FA Technology Ventures Corp. is raising a venture capital fund that is historically large for the Albany area. The company is associated with First Albany Cos., an investment banking, capital markets and venture capital boutique.
The FA Technology Ventures fund has gained publicity in upstate New York, because of its size. Previous venture funds in the area have operated in the $10 million range, but this fund is reportedly targeting a close between $100 million and $150 million.
The firm is keeping quiet about the details. John Cococcia, a principal at FA Tech, declined to comment on the target size of the fund, the fund-raising progress or to name a first-close date.
While this is the first fund for the organization, the principals identified three former investment vehicles as evidence of their track record.
The principals have been involved with First Albany Enterprise Funding, First Albany Cos. and First Albany Private Fund 1999 which were all affiliated with First Albany Cos. As of mid-September, these vehicles had produced a combined 110% net rate of return, according to Cococcia.
Unlike the three former vehicles which had primarily invested First Albany money, FA Tech will raise outside money and invest and operate like a typical VC fund.
The lead investor in the fund is the New York State Common Retirement Fund, which committed $50 million in August. Other investors include First Albany and unnamed individuals.
When asked about the significance of a fund this size in Albany, Cococcia pointed out that FA Tech also has an office in Boston. He said the partners have many contacts in Massachusetts and New York, but he emphasized the fund seeks investments throughout the Northeast and is national in scope.
“We are looking for businesses with unique products and defensible advantages,” Cococcia said. He added that he preferred companies with IPO potential.
Cococcia said the fund would focus on information technology and energy technology. FA Tech considers energy technology to be a developing market and therefore expects those companies to seek smaller investments.
“Energy technology is in its very early stages,” Cococcia said. “There is a lot of opportunity in that sector, and it’s worth our time to find good deals.”
As examples of past First Albany successes, Cococcia cited Mechanical Technology Inc., a now public energy company that spun off Plug Power Inc. He also mentioned TechRepublic.com Inc., which was sold to the Gartner Group; Biazo, an Albany-based application service provider and Improv Technologies Inc., a New York City-based computer graphics software company.
The professionals at FA Tech are ready to invest the vehicle as soon as fund raising is finished. They are already considering a few investments, including two infrastructure companies and an ASP.
FA Tech expects to deploy between $3 million and $8 million per investment. Cococcia declined to elaborate on the fee structure, but he indicated that it could be considered standard for the industry.
The other partners at FA Tech are Greg Hulecki, Ken Mabbs and George McNamee. Keiki Cabanos is the chief financial officer, Michael Choi is an associate and Meg MacClarence is an associate intern. Cococcia indicated the firm may hire at least two more people.