Note: The Skinny blog is written by Rick Smith, editor and co-founder of WRAL Tech Wire and business editor of WRAL.com.
RESEARCH TRIANGLE PARK, N.C. – Kevin Martin, who has a host of connections to the Triangle and North Carolina, has moved from the chair of the FCC to the executive suite in the private sector.
Martin has teamed up with Brian Bailey to form
Carmichael Partners, and they have already made a deal with a $22 million investment in Bandwidth.com, which is based in Cary.
However, Carmichael, which has an office in Martin’s hometown of Charlotte and another in Washington, D.C., is so new that it has yet to raise a fund. Rather than wait, Martin and Bailey, a veteran of private equity investing with N.C. connections as well, came up with the money needed to make the Bandwidth deal since he considered it such a hot opportunity.
“Once we had gotten together and talked with Bandwidth and some of the investors, there was not enough time to raise the capital in the timeline in which we had to focus on raising the money and on closing,” Martin told Stacey Higginbotham at the Silicon Valley-based tech news site GigaOm. He raised the money in some 60 days.
While he can’t discuss specifics of an actual Carmichael fund, Higginbotham wrote “it’s safe to say the two “are planning on raising a growth equity fund focusing on the media, telecommunications and technology sector.” Among the trends they like are Internet Protocol-based communications – and that’s the bread-and-butter for Bandwidth.com.
(Read about the Bandwidth.com deal here.)
Bailey brings his own Carolina connections to the partnership as well as a wealth of experience in private equity deals. He most recently was a managing partner at Charlotte-based Carousel Capital, a firm focused on buyouts. Before that, Bailey worked with private equity giant The Carlyle Group as well as Frostmann Little & Co.
Like Martin, Baily also is a UNC-CH graduate and a former student body president.
Martin, who served as FCC chair over a four-year period in the George W. Bush administration, certainly knows the communications industry as well as the Triangle. Martin earned an undergrad degree at UNC-Chapel Hill, where he also showed some political flair by being elected student body president. He later added a Masters in Public Policy at Duke before securing a law degree at Harvard.
His biography at the Carmichael website spells out quite clearly the experience and the depth of connections that seem to position him as a high-tech investor:
“During Martin’s tenure as FCC Chairman, the FCC created a regulatory environment that encouraged infrastructure investment and broadband competition, leading to greater coverage and decreased prices for Americans. As FCC Chairman, Martin reviewed, approved and conditioned a number of transactions that transformed the media and communications industries. He has also served as the official U.S. government representative to the G-8’s Digital Opportunity Task Force, addressed numerous international conferences as a global leader on media, communications and technology policy, represented the U.S. in dozens of bilateral negotiations and served on the boards of several private companies in Carmichael’s targeted sectors.”
David Morken, chief executive officer of Bandwidth.com, said in announcing the investment deal that he views his partner’s “industry expertise” as a plus.
“Carmichael is an ideal investment partner for us due to its industry expertise and its ability to help us capitalize on future growth and strategic opportunities,” Morken said.
Martin and Bailey plan to be active investors, based on the firm’s stated plans:
“Carmichael’s investment strategy is to work actively with portfolio companies in these sectors to build and transform market-leading businesses. Carmichael believes that this operationally-focused approach appeals to certain families, founders and managers who seek an involved and value-added investment partner to help pursue growth and strategic opportunities, capitalize on industry trends and preserve the cultures of their companies.”
Entrepreneurs in the Triangle have lamented for years about the lack of investment capital available for startups not just here but across the state. Perhaps Martin will help address that problem. The Bandwidth.com deal demonstrates he’s willing to invest back home.
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