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Posts Tagged ‘Grotech’

Grotech raises new $225M fund for early stage tech

Monday, May 13th, 2013

Grotech VenturesVienna, VA-based Grotech Ventures, which invests in early stage tech firms, has raised a new $225 million fund. The fund was oversubscribed by more than 10 percent, and was raised from both existing and new investors. GV II bringsGrotech’s total capital under management to $1.3B across all funds.

Frank Adams, the firm’s managing general partner, told PE Hub that raising the fund took 20 months because institutional investors were “slow and methodical in their due diligence process, more so than in the 29 years we’ve been doing this.”

Grotech Partner Don Rainey tells the TechJournal that the company is investing in Mid-Atlantic and Mid-West early stage IT firms in Enterprise and infrastructure software, social and cloud computing, security tech, consumer Internet, ecommerce, and energy and healthcare It.

Includes Charlotte, Atlanta, RTP

For Grotech, Mid-Atlantic includes the Carolinas and Atlanta, Rainey notes. Adams told PE Hub the company is spending a good deal of time in Atlanta and Charlotte, NC, for instance, developing deep relationships.

Rainey says that while parts of the social sector are crowded and the opportunity has passed, “There is still a lot of greenfield in it.”

Grotech typically invests the first institutional money a startup raises and continues to invest as the firm grows. Its strategy includes forming top-tier industry syndicates with other investors. It generally invests from $200,000 to $20 million in startups, although initial investments tend to be smaller.

Grotech, which has offices in Virginia, Maryland and Colorado, has already made 12 investmetns from the new fund and continues to invest from its current fund, which has performed well.

We asked Rainey if its harder for tech startups to get that first investment these days.

Don Rainey

Don Rainey

“For top tier entrepreneurs its about the same,” he says. “For the next tier that isn’t as obvious as a backable startup, it’s tougher. If you’re the guy or gal who sold your last company for $500 million and you’re doing another raise for a new company, you can expect the processs to be about the same as it was two, five, or ten years ago.”

Successful exits

It recently secured a major exit with NexGen Storage, which Fusion-lo Inc. acquired in April for about $119 million in cash and stock.

It’s largest exit so far was from the DC-based daily deals site LivingSocial. It led the company’s $5 million Series A round and has since sold chunks of its stake to Amazon, Lightspeed Venture Partners, T. Rowe Price and other buyers for more than $200 million.

Overall, Grotech’s last $109 million fund, which closed in 2009, has a current IRR of 70 percent. — Allan Maurer

Five reasons you should attend SEVC 2013

Thursday, February 21st, 2013

SEVC 2013Need a reason why you should attend the Seventh Annual Southeast Venture Conference in Charlotte, NC, March 13-14? Here’s five:

First, you’ll make connections with the region’s top technology entrepreneurs and executives.

More than 50 presenting companies and hundreds of high growth company C-suite execs attending, you’ll have an unsurpassed opportunity to build partnerships and hear about the latest startup trends.

Second, you’ll have an unparalleled opportunity to network with investors and venture firms from throughout the United States, not just regional firms.

Whether you’re in venture fundraising mode or an investor looking to further relationships with fellow investors for deal flow, SEVC is the vehicle to make those connections.

We’ve interviewed several of the participating venture capitalists at the TechJournal, with more to come. Here’s a sample:

 

Brian Rich

Brian Rich, managing director, co-founder, Catalyst Ventures.He’s participating in the Southeast Venture Conference in Charlotte, NC, March 13-14.

How to pitch a venture capitalist (interview with Brian Rich of Catalyst Ventures).

SecondMarket turns dead equity into productive equity (interview with SecondMarket’s Matt Shapiro).

The bar is higher for startups seeking first round financing (interview with Intel Capital’s East Coast Director, Mark Rostick).

Will there be an app economy in five years? (interview with Ron Shah of the Stripes Group).

Seven lessons from the dark side (interview with Grotech’s Don Rainey).

What does it take to build a startup to successful IPO? (interview with Bob Hower, general partner at Advanced Technology Ventures).

Also see: Startups aim to put Charlotte on the map (Charlotte Observer story focused on Terry Cox, founder and CEO of BIG (Business Innovation Growth) in Charlotte. It includes background on how Charlotte was chosen to host the event.

And three more reasons SEVC can kick up your chances for success:

Sevc12_pics

 

3. You’ll gain market insight and success strategies from innovation and technology community’s brightest starts.

From the CEO of SAP to the Publisher of Forbes – SEVC will feature over 40 speakers discussing the latest trends, best practices and strategies relating to technology and entrepreneurial growth. You’ll learn from them not just during roundtable discussions, but in one on one situations through hours of networking.

SEVC

The Southeast Venture Conference is headed to Charlotte, NC, in March 2013. The event offers firms a chance to present to top national venture capitalists and angel investors.

Panel & Presentation topics include:

  • State of Venture Capital
  • Early Stage Fundraising
  • Value Creation: Company/Investor Relationship
  • Growth Stage Funding
  • M&A Outlook and Strategies
  • LP Viewpoint
  • SaaS Investment Trends
  • Getting to Market
  • IPO & Secondary Market Outlook
  • Entrepreneur’s Roundtable
  • International Health Care Trends

4. To make networking and private meetings even easier, there is an online pre-event networking platform for attendees. 

At SEVC, the online networking platform allows attendees to connect with one another prior, during and after the conference. Attendees can see other attendee’s interests, request and setup meetings and connect helping to maximize the lasting connections you’ll make at this year’s conference.

5. Even more CXO and Venture Partner networking to create relationships that can last your entire career.

Networking is center stage at SEVC. Over one and a half days there are 3 separate open bar networking receptions, a networking breakfast, lunch networking and 7 additional networking breaks.

The event sells out, so it’s a good idea to Register today.

 

Grotech VC offers seven lessons on entrepreneurship “from the dark side”

Monday, February 18th, 2013

By Allan Maurer

Don Rainey

Don Rainey

Does price really matter in a venture financing deal? Can “small ideas” still get funded?

Don Rainey, a former entrepreneur, says his 12-years “on the dark side” as a venture capitalist, have taught him a handful of lessons that still serve him daily, among them, answers to those questions and others.

Rainey, a general partner with Grotech Ventures since 2007, was named to the Washingtonian’s “Tech Titans” list in 2011, and currently serves on the boards of Grotech portfolio companies Clarabridge, GramercyOne, HelloWallet, LivingSocial, Personal, SnappCloud, and Zenoss. He’s one of more than two-dozen venture capitalists and other investors participating in the upcoming Southeast Venture Conference in Charlotte, NC, March 13-14.

Price doesn’t matter

On his blog, VC in DC, Rainy outlined ten of the lessons about entrepreneurship that still guide him.

That business about price, for instance. “Price doesn’t really matter,” he says. “If you invest in something htat fails, it’s immaterial. If it wins, you might hope you had bought it a little cheaper, but you’ll always wish for that. The question is, is it something you believe in? If a deal works out, the price was right at some level. Get in good deals, and forget about getting the last dollar in a negotiation for that good deal.”

He adds, “We’re judged by whether the companies we invest in succeed, not the price.” Also, he notes, “Sometimes you do everything right and sill lose. Macro events can put real pressures on a company. Just think if you had gone into something aimed at financial services in 2007. Some things are beyond your control.”

Don’t pursue small ideas

Big ideas and small ideas are equally difficult, he says. But a venture capital firm has to have some multiple return on the capital it invests and can’t support small ideas, Rainey says. On his blog, he writes,  “What’s the point in trying to change the neighborhood when you can change the world.”

You’re not a rock star

“I’m very suspect of the venture capitalist who wants to be in front of the parade,” Rainey says. “That’s the role of the entrepreneur. We’re enablers, not the primary actors.”

Add value outside of board meetings

Portfolio company board meetings are not the place where a VC adds real value to the firm’s investment. “Private conversations over coffee, lunch, or late at night is when you really can influence the CEO,” Rainey says.

Don’t Invest in People who don’t take advice

Some entrepreneurs have a world class talent for ignoring good advice, Rainey notes on his blog. “I’ve done this 12 years and only had one CEO who ignored my advice and failed. He made a point of it. It wasn’t personal, he ignored everyone’s good advice. A good CEO listens to everyone.”

Then, he’ll let you know he heard you, saying something like, “I concur on these four items from your suggestions. “That’s what the smart ones do,” Rainey says. “They assimilate all that advice and incorporate it into their own perspective.”

Never Panic

Starting and running a business is often fraught with extreme ups and downs, more than one entrepreneur has told us. One day you land a really big customer, the next everyone you talk to says “No.” An entrepreneur has to be able to ride that roller coaster. “One of the great assets of an entrepreneur is confidence,” Rainey says.

“It does ebb and flow. There are days when you’re driving to work thinking there is no way you could be more screwed than you are at that moment, but when you get to work, you find out you were wrong, there are ways it can be worse. It’s hard. People don’t always appreciate how challenging it can be to be able to swing above your weight in the face of weeks or months of bad news. But you have to keep on fighting, even with a strong headwind.”

Be nice to people, it pays well

“In a business like ours,” Rainey says, “You have to say ‘no’ to 99 of 100 people who come to you for money. If you’re not nice to people, even when you have to say ‘no,’ they remember. They also remember if you were nice about it. None of knows where we’ll be in five years or what we’ll be doing.”

 

Funded: Impermium, $1M for social web anti-spam service; RealDirect, $2M

Tuesday, June 28th, 2011

ImpermiumPalo Alto-based- Impermium has nabbed a $1 million seed financing round, which will enable the company to accelerate development of the world’s first service to deliver “anti-spam for the social web.”

Investors participating in the self-led funding round include Accel Partners, AOL Ventures, Charles River Ventures, Freestyle Capital, Greylock Discovery Fund and Morado Ventures. Angel groups Archimedes Capital and Embarcadero Ventures also contributed to the round.

Impermium was founded by former Yahoo! “Spam Czar” Mark Risher, Vish Ramarao, and Naveen Jamal. Prior to Impermium, the co-founders led the anti-spam and security group at Yahoo! Mail, where they drastically reduced spam and fraud for Yahoo! customers through sophisticated detection algorithms and machine-learning technologies.

The Impermium social spam and abuse defense platform is now available in limited beta. The company is working with numerous publishers across the social web, defending against attacks in the areas of spammy user-generated content, fraudulent registrations, account hacking, stolen passwords, and related forms of abuse.

Grotech only sold a minority of LivingSocial Shares

Dan Primack reports in his Fortune.com Term Sheet that the shares of LivingSocial that Virginia-based Grotech sold are just a minority of its holdings in the daily local deals firm. LivingSocial, which just purchased three foreign local deals companies, is giving Chicago-based Groupon a run for its money in the highly competitive space.

Primack notes that VentureWire says buyers of the Grotech LivingSocial shares included Lightspeed Venture Partners and T. Rowe Price.

New York-based RealDirect grabs $2M for homeowner marketing platform

RealDirect. a company with an online marketing platform for homeowners selling their property has raised a $2 million first round led by GSA Venture Partenrs with participation from Bendigo Partners and High Peaks Venture Partners.

Funded: Atlanta, Digital Assent and Renewvia; Maryland, Regent Education, more

Monday, June 27th, 2011

Digital AssentAtlanta-based Digital Assent, provider of the award-winning PatientPad self-service patient check-in and patient education solution, has received $7.5 million in a Series B funding round.  The lead investors were Sanan Private Equity, the BIP Opportunities Fund and Buckhead Investment Partners (BIP).  Imlay Investments and BLH Venture Partners, who led the Series A funding earlier this year, also contributed.

The PatientPad is a wireless touch-screen solution that automates the patient check-in process and delivers targeted health information and advertising to interested patients while they sit in their healthcare provider’s waiting room, exam room or treatment room. This funding will fuel expansion of the company’s sales, marketing and product development efforts.  Since January, the company has sold nearly 1,500 PatientPads to 175 practices in 25 states.

Atlanta’s Renewvia beams in $2.26M for solar tech

Atlanta-based solar power firm Renewvia has beamed in $2.26 million of an equity raise targeted at $6.15 million, according to a filing with the U.S. Securities and Exchange Commission. The company raised a bit over $1 million in a round aimed at $2 million in June 2009.

The company develops, installs, owns and manages solar powr plants for commercial property owners and developers.

Regent Education raises $4.5M for college financial aid automation tech

Frederick, MD-based Regent Education has chalked up $4.65 milion of a $5 million equity offering, according to a filing with the SEC.  The company previously raised about $1.85 million.

It sells SaaS solutions for colleges and private education institutions to automate financial aid processes. It caters to schools with non-standard or non-term offerings. It processes more than 1 million students a year.

Grotech sells LivingSocial stake for $200 million

PE Hub reports that venture firm Virginia-based Grotech has sold its stake in group local buying firm DC-based LivingSocial for $200 million. PEHub’s Jonathan Marino reports that Grotech did so without using secondary markets, instead making private sales to investors in multiple blocks.

Virginia-based MANDIANT closes strategic investment wiht One Equity Partners

MANDIANT, which sells detection and response solutions and services says it has closed on an equity investment from One Equity Partners. The amount of the financing was not disclosed.

Headquartered in Alexandria, Va., with offices in New York, Los Angeles and San Francisco, MANDIANT provides products, professional services and education to Fortune 500 companies, financial institutions, government agencies, domestic and foreign police departments and leading U.S. law firms. MANDIANT comprises one of the industry’s largest incident response and forensics forces.

“Over recent months the importance of knowing whether your network has been breached has become alarmingly clear. MANDIANT is the global leader in helping major corporate and government entities answer this question and execute an effective response. With the experience and financial resources of MANDIANT’s new investors, we are confident MANDIANT will prosper in the years ahead,” said OEP’s Jody Gessow.

Foursquare locates $50M

Foursquare, the location-based mobile platform and social network that helps members gain points for sharing information about local venues and brands, has raised $50 million in a round led byAndreessen Horowitz with participation from Spark Capital and O’Reilly Alpha Tech Ventures and Union Square Ventures. TechCrunch says the company’s pre-money valuation is $550 million.

Foursquare co-founders Dennis Crowley and Naveen Selvadurai met in 2007 while working in the same office space (at different companies) in New York City. Working from Dennis’ kitchen table in New York’s East Village, they began building the first version of foursquare in fall 2008, and launched it at South by Southwest Interactive in Austin, Texas in March 2009.

Foursquare has about 10 million users globally and 3 million check-ins daily. More than 400,000 businesses are using its Merchant Platform. Headquartered in New York, it has about 70 employees.

LivingSocial adds $1.6M to war chest as group buying space remains hot

Wednesday, May 4th, 2011

WASHINGTON, DC – LivingSocial, the DC-based local discount deals firm that is second only to Chicago’s Groupon in that space, has closed on an additional $.59 million equity raise, according to an equity filing. The company raised $400 million in April and a total of $600 million since its founding as it races to put people on the ground in market after market in competition with Groupon and a host of smaller local group buying firms.

LivingSocial investors include Amazon, Lightspeed Venture Partners, Rowe Price, and Institutional Venture Partners, Case Foundation Ventures, U.S. Venture Partners, and Grotech Capital Group.

The latest raise, disclosed in a filing with the U.S. Securities and Exchange Commission, shows that the space remains hot.  Although this raise is minimal compared to previous ones, investors apparently still want a piece of the action.

We previously noted reports in the Wall Street Journal and Bloomberg that the company was considering a $500 million raise at a valuation of around $2 billion. VCExperts says the raise could actually value the company at around $3 billion.

LivingSocial now offers it daily deals in more than 200 markets and putting people on the ground in most is part of what costs so much money.

The company raised $175 million from Amazon and $8 million from its other venture backers three months ago, following a  $950 million raise by Groupon.

In December, LivingSocial said it brings in about $1 million a day.

Some reports have said that LivingSocial could actually overtake Groupon in terms of dealflow by next year if current trends continue. An additional $500 million would likely accelerate their progress.

Although both LivingSocial and Groupon are well-financed and have a huge lead in creating national organizations, both face competition from smaller players, often operating in just a handful of markets. We recently reported on Twongo, one such competitor based in the Research Triangle, which operates in several North Carolina and Canadian markets.

We would be willing to be both Groupon and LivingSocial will start buying up some of the smaller players with viable, successful markets. The question is whether they will keep whatever differences made the smaller players successful in their markets.

TechJournal South is a TechMedia company. TechMedia presents the annual conferences:

SoutheastVentureConference: www.seventure.org

Internet Summit: www.internetsummit.com

Digital East: www.digitaleast.com

Digital Summit: www.digitalsummit.com

Rockville-based Hillcrest Labs nabs $5.5M for motion control tech

Wednesday, April 13th, 2011

Hand with the Loop

ROCKVILLE, MD – Hilcrest Laboratories, which sells motion control interactive TV applications, has raised $5.54 million, according to a regulatory filing.

The company raised a $25 million D round led by AllicanceBernstein with previous investors New Enterprise Associates, Columbia Capital, and Grotech Captal participating in 2008.

Peter Barris, director of NEA, Frank Adams, director of Grotech, and R. Philip Herget, of Columbia Capital, are all listed as principals in the filing with the U.S. Securities and Exchange Commission disclosing the current raise.

Founded in 2001, the company previously raised a total of $50 million in venture backing, a spokesperson told TechJournal South.

Hillcrest Labs’ patented Freespace motion control technology senses motion in three dimensions and precisely translates human motions into on–screen cursor movement. When embedded in a handheld input device, Freespace allows consumers to simply point and click to navigate content and application choices on televisions, set–top boxes, PCs and a range of other digital media devices. Freespace can also be adapted for use in game controllers.

Hillcrest sells an application creation platform called HoME, which enables consumer electronics
manufacturers and service providers to create unique interactive digital media products for TV and other digital media devices.

Applications made with HoME are controlled by pointing and provide consumers an intuitive way to browse, discover, and interact with large volumes of digital media. It can be used in a wide range of consumer devices including remote controls, PC mice, and game controllers.

The first hardware implementation of Hillcrest’s Freespace motion control technology was The Loop pointer.  The Loop pointer is the in-air mouse that moves your cursor with natural hand motion.

Its patented  technologies have been adopted by industry leaders such as LG Electronics, Logitech, Broadcom, SMK and Universal Electronics.

 

TechJournal South is a TechMedia company. TechMedia presents the annual conferences:

SoutheastVentureConference: www.seventure.org

Internet Summit: www.internetsummit.com

Digital East: www.digitaleast.com

Digital Summit: www.digitalsummit.com

 

LogRhythm taps in $4.9M for log management appliance

Monday, March 7th, 2011

LogRhythmWASHINGTON, DC- LogRhythm, a company formerly headquartered in DC but now in Boudler, Colorado, has raised $4.9 million raise from investors including Virginia-based Grotech, according to a regulatory filing.

The company sells an appliance with features that include log management and analysis, file integrity monitoring, event management, network and user monitoring, and geolocation tracking, this product can provide the detail needed for in-depth security event analysis. It helps firms comply with regulations and secure their networks.

The company disclosed the raise in a filing with the US Securities and Exchange Commission, which cites Ray Croghan, of Longmont, CO-based Croghan Investments, Frank Mendicino III of Denver’s Access Venture Partners, and Joe Zell of Grotech Partners among the principals.

TechJournal South is a TechMedia company. TechMedia presents the annual conferences:

SoutheastVentureConference: www.seventure.org

Internet Summit: www.internetsummit.com

Digital East: www.digitaleast.com

Digital Summit: www.digitalsummit.com

VCs pouring money into iPad, iPhone plays

Friday, August 20th, 2010

iphone4While some folks in the mobile space we have talked with say Android phones are gaining traction and Apple had to deal with the overblown Antennagate problem, venture capitalists have rained money on iPhone and iPad startups focused purely on developing apps for those devices in the last 12 months, according to a report by CB Insights.

In 17 rounds, 16 firms raised $120.6 million with the average raise pegged at $7.5 million. The largest deal was for $25 million and the smallest for $200,000.

VCs led about 60 percent of the deals, while angels took the lead on aboug 18 percent. VCs and angels partnered to fund about 25 percent of the deals.

Nevertheless, some VCs remain skeptical about the sustainable business potential of the space.

In a recent interview, Don Rainey of Grotech Capital, who is one of 50 speakers at Tech Media’s Digital East conference Oct. 18 at Tysons Corner, VA, said he has yet to see a mobile app pure play that made a lot of money for a company. “It’s a hit oriented business and it’s tough to keep coming up with hits,” he says.

LivingSocial grabs another $10M plus for expanding local deals biz

Monday, August 2nd, 2010

LivingSocialBy Allan Maurer

WASHINGTON, DC – LivingSocial’s aptly named parent company, Hungry Machine Inc., has snagged $10.23 million in equity from investors including Grotech Ventures, U.S. Venture Partners, and Steve Case’s Revolution, bringing its total financing this year alone to nearly $50 million. The company has been ramping up its local group buying service, LivingSocial deals, rapidly, nearly doubling its markets in mid-July(LivingSocial nearly doubles its markets in one day).

The company disclosed the raise in a filing with the U.S. Securities and Exchange Commission.

LivingSocial closed a $14 million round led by Lightspeed Ventures in April on the heels of closing a $25 million round in March. It had previously raised $10 million.

The Northern Virginia Technology Council recently recognized LivingSocial’s earlier raise as the best VC deal of the year in its annual awards.

Interested in finding out how LivingSocial has gained such traction? John Carpenter, director of Marketing, LivingSocial, is one of more than 50 confirmed expert speakers slated for TechMedia’s first Digital East 2010 event at Tysons Corner, VA, October 18. (see: First Digital East Event set for October).

The company presented its business plan at TechMedia’s 2007 Southeast Venture Conference.

A Lightspeed managing director told the Wall Street Journal LivingSocial is growing as fast or faster than Groupon. The online group discount business can probably handle several leading players, but consolidation is likely somewhere down the road.

The companies all offer discounted group buying deals in local markets.

Chicago-based Groupon itself nabbed a $135 million round this year. Other competitors include Buywithme and Kashless.

Founded in the summer of 2007, LivingSocial began as a social discovery and cataloging network offering applications such as Pick 5 on social networks such as Facebook and Twitter that allow people to review and share their favorite movies, books, games, music, restaurants and beer.

Contact Tech Journal South Editor and writer Allan Maurer: Allan at TechJournalSouth dot com.

Zenoss nabs $4.83M of $5.2M round for open source IT managment

Monday, June 21st, 2010

ZenossANNAPOLIS, MD - Zenoss, a commercial open source software company delivering network, server and application monitoring solutions, has raised $4.83 million of a $5.2 million round, according to a regulatory filing. The company previously raised about $20 million.

Investors include many venture firms we know well, Grotech Ventures, Intersouth Partners, Boulder Ventures, Amplifier Venture Partners, Silicon Valley Bank and the Maryland Department of Business and Economic Development’s Enterprise Investment fund.

Founded in 2005, the company’s products monitor more than one million network and server devices daily and have been used by more than 25,000 organizations in 180 countries. Zenoss Enterprise is a single model, commercial open source-based product that enables organizations to seamlessly manage physical, virtual and cloud based infrastructure.

Commercial customers include leading companies such as Rackspace, VMware, LinkedIn, Carlson, Motorola and Deutsche Bank.

In April, it won he 2010 Innovator award by the Chesapeake Regional Tech Council (CRTC). In 2009, Zenoss also won CompTIA’s Innovator of the Year in Enterprise Software.

Andy Jones, formerly with Boulder Ventures, joins High Street

Thursday, May 20th, 2010

highstreetpartners logoANNAPOLIS, MD – Andy Jones, a veteran of Grotech and most recently Boulder Ventures, has joined Annapolis-based High Street Partners as a vice president of corporate strategy.

High Street notes that Jones brings 23 years of successful experience in venture capital, consulting, operations and engineering to the firm.

He is responsible for leading short- and long-term corporate planning, impacting business development and sales, strategic partnerships, fund raising and M&A opportunities.

He also heads the development of HSP’s new customized SaaS application to streamline client operations, scheduled for formal launch later in 2010.

Before joining HSP, Jones spent 13 years in venture capital at Grotech Ventures and then as general partner at Boulder Ventures. Prior to Grotech, Jones was with Andersen Consulting and Deloitte Consulting. He began his career as an engineer at Motorola.

High Street, which raised $6 million in financing earlier this month, sells international business services, providing a single source for the implementation and ongoing management of international subsidiaries and other entities, including registration, payroll, accounting, bookkeeping, tax compliance, advisory and HR localization services.