Venture-capital fund helping 2 firms, plan to back more
A new Champaign-based venture capital fund has invested in two businesses, committed to a third and expects to invest in a couple more by year’s end.
Serra Capital, which is managed by Serra Ventures, had the first closing for the fund this month, raising $3 million, and expects to raise a total of at least $7 million by June 30, 2011.
So far the fund has invested $100,000 in Caterva, a startup company at the University of Illinois that’s developing a real-time social networking platform, and $90,000 in Striped Sail, a company started by UI grads that’s designing accessories for the Apple iPad.
Serra Capital has also made a commitment to invest in Snapshot Energy, a company readying a technology for converting municipal waste into biocrude oil.
The principle in the new capital fund are Tim Hoerr, a former RSM McGladrey consulting partner who later served as chief executive officer of iCyt Mission Technology, and Denis Beard, a general partner in and the chief financial officer of Open Prairie Ventures.
Serra Capital plans to concentrate its investments in seed-stage and emerging stage companies, with a small portion devoted to later stage enterprises. Hoerr said investments will generally be in the $100,000 TO $500,000 range though it may make smaller investments if that appears beneficial in certain situations. In most cases, Serra will be a co-investor.
Open Prairie, which has it own venture capital fund, tends to make larger investments in more established companies that often already have a revenue stream, Beard said.
Based in the UI Research Park, Serra Capital will concentrate on four technology sectors:
Information technology and software
Life sciences
Clean technology
Agriculture technology
Most investments are expected to be in the Illinois, Texas and California areas. Serra works closely with companies and an opportunity at the UI, but Hoerr lived in California for four years and also has ties to Texas.
Two of his children attend Baylor University in Waco, Texas, and Hoerr serves on the board of directors of the Baylor Technology Entrepreneurship Institute.
Though the Serra Capital fund expects to complete fund raising by the end of June, it doesn’t expect to complete its investing until September 2014. The fund is projected to have a 10-year life.
So far, there are nine limited partners in the fund, and Hoerr said 10 to 12 potential deals are being evaluated at this point.
The commitment to Snapshot Energy would boost the efforts of UI agricultural and biological engineering professors Lance Schideman and Yuanhui Zhang to convert municipal waste to biocrude oil by means of a hydrothermal process paired with an algae loop, Hoerr said.
It is thought that municipal sanitary districts would adopt the process and thereby gain a revenue generating source. Hoerr said the company hopes to build a pilot plant in 2011 and advance to commercial scale in 2012.
Among other opportunities being studied: ventures from the UI dealing with computer science and medical devices, and a Texas-based software company that targets medical service providers as clients.
Separately, Serra Ventures plans to launch an awards program next year, in conjunction with the Champaign County Economic Development Corp’s Innovation Celebration.
The TGIM Workplace Excellence Awards Program would recognize companies for a ‘culture of excellence’ based on employee responses to an online survey.
The survey will be made available, starting Monday through November 19, 2010, to companies that choose to participate.
The grand prize winning company will get $500 from Serra Ventures, as well as a $500 donation to the charity of the company’s choice. Each employee of the company will receive a $75 gift card, Hoerr said.