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January 24, 2001 Fledgling
Venture-Capital Fund Already Halfway to its Goal Two Triangle professionals who are well known in the world of technology start-ups have teamed up to form a new venture-capital fund that has raised nearly half of its $15 million goal from investors. The new fund, Research Triangle Ventures, is the brainchild of lawyer Fred Hutchison of the Raleigh firm of Hutchison & Mason and accountant Tim Gupton of the Raleigh firm of Hughes Pittman & Gupton. Hutchison was a co-founder and the first president of the Council for Entrepreneurial Development, and Gupton is chairman of CED, a not-for-profit support group for entrepreneurs. The fund's success raising money in a difficult funding environment is a considerable achievement, other venture capitalists said. The bursting of the Internet bubble and subsequent collapse of technology stocks has had a negative impact. One problem is that the investment portfolios of many wealthy people have taken a big hit, leaving them uninclined - or unable - to invest in venture capital. "I think it is really impressive that Tim and Fred have gotten this far" toward their $15 million goal, said venture capitalist Alan Taetle of Noro-Moseley Partners in Atlanta. Mitch Mumma of Intersouth Partners, a Durham venture-capital firm, said there have been reports of venture capitalists at established firms elsewhere who have stopped trying to raise money for new funds because the environment is so bad. But Hutchison and Gupton said they have an advantage in raising a first-time fund because valuations of start-ups have returned to reasonable levels and because they're not saddled with investments in struggling Internet companies. Hutchison and Mason will remain with their respective law and accounting firms in addition to managing Research Triangle Ventures. To run the day-to-day operations, they recruited F.M. "Bud" Whitmeyer Jr. He is a veteran of 11 years at SAS Institute, where he was a principal systems developer and project manager, and most recently was vice president of product development at Electronic Healthcare Systems in Birmingham, Ala. Research Triangle Ventures will focus on seed investments in early-stage information technology and biotech companies. Initial investments will be in the $250,000 to $400,000 range, although when follow-up investments are tabulated, the fund expects to invest a total of $800,000 to $1 million in each company. The firm made its first investment in a Triangle company, OpenMind Publishing Group, an online publisher of college text material. Research Triangle Ventures closed on $5.5 million raised from investors at the end of December and has since conducted additional closings that have pushed the total to $6.7 million, Hutchison said. Venture capitalists raise money from individual and institutional investors, then use that money to buy stakes in young companies with high-growth potential. Reprinted with permission
of the News & Observer of Raleigh, North Carolina.
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