May 23–A venture capitalist, an entrepreneur and a seasoned investment manager have partnered to launch a $125 million investment fund in Austin.<\/p>\n
Blue Sage Capital is the first fund created in Austin in at least two years, said Kirk Walden, director of venture capital research for PricewaterhouseCoopers accounting firm.<\/p>\n
The fund is headed by Peter Huff, a former partner at Austin Ventures; Jim McBride, who is leaving his role as manager of the LBJ Holding Co.; and Bo Baskin, former chief executive of Baskin Family Camps Inc., which owns and operates summer camps and corporate conference centers in Texas and Colorado.<\/p>\n
“We’re generalists — we’ve invested in everything from running-shoe companies to education companies to technology services,” said Huff, 33, who came to Austin Ventures three years ago from Whitney and Co., a New York-based venture firm.<\/p>\n
Blue Sage plans to invest in established companies in Texas and the Southwest, targeting profitable companies with annual revenue of $5 million to $100 million.<\/p>\n
It plans to make 15 to 20 investments of $5 million to $15 million during the next five years. About half the deals will be buyouts. The other half will provide growth capital.<\/p>\n
A typical Blue Sage deal would involve a self-financed company whose owners are looking for money to expand or are ready to cash out.<\/p>\n
“We’re seeking companies with existing customers and existing cash flow,” Huff said.<\/p>\n
“We won’t take risks on unproven concepts. When we step in, the widget already works.”<\/p>\n
A private-equity fund differs from a venture capital fund in its approach. Venture capitalists usually back young unproven companies. Private-equity firms seek proven companies that need money to grow.<\/p>\n
“You hear people on the street talk like this kind of funding doesn’t even exist anymore,” said Kirk Walden, director of venture capital research for PricewaterhouseCoopers.<\/p>\n
“This is proof that in Austin it’s not going away.”<\/p>\n
But Blue Sage is likely to encounter plenty of venture firms because in a weak economy, many of them are shying away from startups in favor of more mature companies.<\/p>\n
“That’s where venture capitalists want to be: in deals where the companies are near profitability and have momentum and less risk,” said Gene Lowenthal, a partner with the Austin office of Growth Capital Partners, a Houston-based investment bank. “It’s a difficult time to be an early stage company.”<\/p>\n
Blue Sage raised money from institutional investors, including state pension funds, family endowments and large financial organizations. Blue Sage, which initially planned to raise $100 million, expects additional commitments will push the fund to $150 million.<\/p>\n
—–<\/p>\n
To see more of the Austin American-Statesman, or to subscribe to the newspaper, go to http:\/\/www.austin360.com<\/p>\n
(c) 2003, Austin American-Statesman, Texas. Distributed by Knight Ridder\/Tribune Business News.<\/p>\n","protected":false},"excerpt":{"rendered":"
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