RESEARCH TRIANGLE PARK – Three venture capitalists in Florida have launched a new firm with a target of $100 million for its initial fund-raising.
Called Sunrock Ventures, the threesome is based in Tampa but is already looking for deals across the Southeast. And while the firm is new, none of its founders are new to the business or the region. They have hit the ground running.
“I’ve already had a call this morning, and we just opened the doors today,” Tate Garrett, the managing director at Sunrock, told WRAL Local Tech Wire on Friday. “That shows there is a lot of pent-up demand. We won’t have trouble deploying capital at all.”
Garrett and his partners Matthew Shaw and Jeffrey Wolf have more than 30 years of venture experience and have been involved in more than $140 million worth of deals. Their collective resumes includes work with Advantage Capital, Berenson Minella Ventures, The Castle Group, Centennial Ventures, Crossbow Ventures, Prime New Ventures and Seed-One Ventures.
They have yet to close on any cash, but Garrett pointed out Sunrock has received “expression of interests” as the partners initially work “our personal networks in Florida.” However, they will be taking their fund-raising road show to the Triangle, Atlanta and elsewhere very soon.
“We’ll get up to the Triangle; it will be one of our first stops,” Garrett added. “I know some of the folks at The Aurora Funds, Intersouth and River Cities. We also want to meet with angel groups.
“Anybody who is ready to write a $5 million check – we’ll be happy to talk to them.”
Garrett and his partners believe there is plenty of room for another VC firm in the Southeast for two reasons – opportunities for investment and the lack of capital.
“The story we are telling in raising money is that we contrast the incredible depth of opportunities in the southeast with the lack of capital,” Garrett said. “There is a lot of tremendous research going on at universities, and there are some great management teams forming new ventures. We think this region is way underserved in venture and angel capital.”
Garrett noted that their research shows while the southeast contains 20 percent of the U.S. population, economic output and technology it receives only 5 percent of the venture capital. And regional VC firms manage less than 3 percent of that capital, Garrett added.
“We’ve been pleasantly surprised at the reaction so far,” Garrett added. And he believes two other factors – the current troubles on Wall Street – are helping boost their efforts.
“In a strange way the economy is helping us,” he said. “The real estate market has cooled and the stock market is shaky. Wealthy individuals are ready to take some of their money out of those markets.”
Since the firm is new, its partners are targeting high net work investors. “We have a great record individually,” Garrett said, “so that makes it tougher for institutions to invest in us.”
Sunrock’s emphasis on investment will be “primarily early stage,” he added, although “we might be open to some seed stage.”
The threesome will look to make between four and six investments a year in a variety of areas. “We have very complimentary skill sets,” Garrett said.
Garrett calls himself the “IT guy,” and he also has experience in telecommunications. Wolf has a background in life sciences, and Shaw has worked in business services as well as some IT.
Sunrock’s plan is to invest in up to six companies per year and as many as 24 firms over the next four years. “Our challenge is to grow at a measured pace,” Garrett explained. “We want to be disciplined and not get too excited about all the things we see.”