WASHINGTON – Anticipating that its first fund will be fully invested by the middle of this year, Women’s Growth Capital Fund has returned to the fund-raising fold with its second investment vehicle.
The Washington-based firm is looking to land between $75 million to $100 million and add a crop of new institutional investors to its limited partner roster before shuttering Fund II at the end of June.
As its moniker implies, the Women’s Capital Growth Fund is dedicated primarily to helping early- and expansion-stage businesses that are owned and/or managed by women. As such, approximately 70% of its existing LPs are women.
Although it has yet to approach any new investors, the firm anticipates greater participation from institutional players, namely pensions and endowments, in Fund II, noted Wendee Kanarek, managing director with The Women’s Capital Growth Fund.
In the past, its LP roster has included such prominent financial industry powerhouses as Bank of America Corp., First Union Corp., BankBoston and State Street Corp., but Kanarek declined to comment on which new LPs might be on the firm’s radar screen.
A Running Start
Despite the fact that its three partners have literally only just begun knocking on investors doors, Fund II already has two institutional commitments in the bag. As the firm’s sophomore fund is slated to be three times the size of its $30 million freshman vehicle, the average investment size will likely be much larger than Fund I’s $2 million investment cap, hovering around $5 million over the life of each portfolio company, Kanarek said.
Depending on the fund’s final capitalization, the firm will probably make about 15 investments in technology plays from infrastructure businesses to software companies over the next three years, she added.
The Women’s Growth Capital Fund also will stay true to its East Coast roots, investing up and down the mid-Atlantic coast. “We anticipate our portfolio will mirror the region,” Kanarek said. “We’re seeing a lot of activity in West Virginia, Maryland and D.C., especially in telecommunications and life sciences. We’re also networked in the women’s entrepreneurial space in New York and Boston.”
Fund II has a standard 80%/20% carried interest structure, and will be managed by Kanarek, Principal Ashley Allen and fellow Managing Directors Patty Abramson and Rob Stein.
Raising Fund II hasn’t entirely diverted the firm’s attention from doing deals. In fact, The Women’s Growth Capital Fund signed on to participate in a series B round of financing for Web concierge firm VIPdesk in February. The firm, which had previously led VIPdesk’s series A round, co-invested in the $7.43 million second-round transaction alongside lead VC Pennsylvania Early Stage Investment Partners. Repeat investors Scripps Ventures and The Dinner Club also came on board, along with newcomers InRoads Capital and SEI Investments.
Kanarek said the latest investment came out of Fund I. She anticipates that the firm will make two more deals before its initial fund is fully invested.