SCOTTSDALE, Ariz. – Valley Ventures II reached a $20 million first close just before Thanksgiving and is slated for a first-quarter wrap on or near its $35 million target.
The two-partner firm will back early and later-stage companies in the Southwestern United States, including health-care businesses (VCJ, November 1998, page 21).
Valley Ventures, the first fund Jock Holliman and Michael Collins have raised together, has not been marketed to larger pensions with gatekeepers because of the fund’s small size. Also, this is the first vehicle the two partners will manage as a team, explained Mr. Holliman.
Mr. Holliman formed Valley Ventures in 1993 by raising capital to buy out the $10.1 million Small Business Investment Company of Valley National Bank of Arizona, which he had created. Dr. Collins, who holds both a medical degree and an MBA, joined last year from Assist Technologies Inc., a medical software company in Mr. Holliman’s SBIC portfolio (VCJ, August 1998, page 20).
“We had a lot of success, but with a narrow niche of the fund-raising universe,” Mr. Holliman explained.
Limited partners include BancBoston Investments, a trust affiliate of Norwest Bank, Minnesota Life Insurance through its investing arm Advantus Capital Management and money manager Cramer Rosenthal McGlynn.
About a half-dozen institutions were considering investing in the fund and could be part of the next close. “We’re in real good shape,” Mr. Holliman said.
Mr. Holliman and Dr. Collins have shifted their attention from fund raising to investing. At press time, Valley Ventures was slated to lead a $5 million second round financing of an Orange County, Calif., pharmaceutical company. The venture firm will put $1.5 million into the company, which Mr. Holliman declined to name.