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Florida Opportunity Fund

Fri, 01/16/2009 - 10:32 -- rprice

I've been a long-time follower of Dan Rua, and I've even had the pleasure of meeting the guy. His business, Inflexion, is venture capital - they invest in biotech and technology startup companies. It's a great thing for the state of Florida to have funding like that available locally.

However, for smaller, "early stage" companies, venture funding is not really the way to go. There are phases to these things... and that's not Dan's business.

Now, there is someone playing that middle field, and it's the Florida Opportunity Fund. It's their mission to "...focus on identifying and investing in a diversified, high-quality portfolio of seed and early stage venture capital funds that target in whole or in part opportunities within Florida".

So, it's a collection of early-stage funds? Huh? But there's money? What's it for?

Ah, some clarification here:

The FOF is a fund of funds that directs investments into venture capital fund managers who in turn invest in seed and early stage concepts in Florida. The $29.5M program is sponsored by Enterprise Florida and is managed by Florida First Partners ("FFP").

They're trying to create an ecosystem of investors and funds, the right atmosphere for funding a startup, or growing an existing company. It looks like if you have an existing pool of money, they can help, by giving you more...?

That's all well and good, and thanks to the state legislature, but what do the experts have to say?

Dan recently wrote on his blog:

I think it's another smart step in the right direction. A pool of $30M split among a few early-stage venture funds isn't going to change the state's venture ecosystem overnight. However, I've seen firsthand how quality in-state lead investors bring national venture dollars to the state. For example, Inflexion, Florida's Venture Fund, has experienced 11-18 dollars of co-investment for every Inflexion dollar invested into early-stage companies.

Now that the politicians have taken a key step, setting up the fund with its core goals, it falls to the Florida Opportunity Fund to deliver on those goals, in the face of a difficult macro-environment, plenty of naysayers and likely political pressure along the way. Florida presents unique challenges and opportunities for early-stage venture funds, requiring local access to multiple hotspots across the state combined with national relationships. Early-stage company building is a local business and flying in for periodic board meetings, even by the largest funds in the country who will claim some Florida connection, just doesn't cut it for early-stage.

It's an older blog post, but Rich Swier had something to say when the initial bill was passed.

In looking this up, I also learned about the state of Florida's venture economy:

Some of those companies have already attracted top venture capital firms. This year, Kleiner Perkins Caufield & Byers and Index Ventures invested $34.5 million in Lehigh Technologies, a Naples company that makes rubber powders for greener manufacturing. Benchmark Capital invested $12 million in Pentaho, an Orlando open-source business intelligence software company that has also been funded by Index Ventures and New Enterprise Associates.

Pentaho? WTF? Who's that? Enterprise Business Intelligence, you say? In Orlando? Open Source? Why don't these guys come to BarCamp?

Back to the topic at hand, it looks like perhaps the state has managed to make something that will look really great, but in practice, maybe not the best...


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