Despite my time off the grid for the holidays it was hard to miss some of the buzz around the recently announced Florida Opportunity Fund. It didn’t hurt that I’ve been following the topic closely for the last year — you can imagine it’s close to my heart. The origin of the Florida Opportunity Fund stems from legislative action in 2007 creating roughly $30M of capital focused on in-state early-stage venture capital: 2008->Chapter%20288->Part%20X”>The Florida Capital Formation Act.
The logistics of deploying that capital properly is that Enterprise Florida was given the responsibility and funding to create a custom fund-of-funds (FoF), including a governing board and professional FoF managers. The governing board was announced back in 2007, including Pete Pizarro, Kenneth Wright, Diane Cook, Paul Hsu, and Andy Hyltin
The recent announcement covered the selection of its FoF manager: Florida First Partners, a joint-venture between Milcom and Credit Suisse-Customized Fund Investment Group. That announcement essentially signals the Florida Opportunity Fund is open for business and looking for quality Florida-based venture funds to leverage Florida’s pool of talented entrepreneurs and world-class technology into superior venture returns. Jennifer Dunham and Melford Carter are the current contact points for inquiries.
So, those are the facts, what’s my interpretation?
I think it’s another smart step in the right direction. A pool of $30M split among a few early-stage venture funds isn’t going to change the state’s venture ecosystem overnight. However, I’ve seen firsthand how quality in-state lead investors bring national venture dollars to the state. For example, Inflexion, Florida’s Venture Fund
, has experienced 11-18 dollars of co-investment for every Inflexion dollar invested into early-stage companies.
Now that the politicians have taken a key step, setting up the fund with its core goals, it falls to the Florida Opportunity Fund to deliver on those goals, in the face of a difficult macro-environment, plenty of naysayers and likely political pressure along the way. Florida presents unique challenges and opportunities for early-stage venture funds, requiring local access to multiple hotspots across the state combined with national relationships. Early-stage company building is a local business and flying in for periodic board meetings, even by the largest funds in the country who will claim some Florida connection, just doesn’t cut it for early-stage.
Local effort + national networks + quality track records = superior investment returns for the Florida Opportunity Fund.
That said, just as Inflexion alone hasn’t filled the early-stage venture gap in Florida, the Florida Opportunity Fund isn’t a silver bullet. Participation by angel groups
, the State Board of Administration
and the state’s largest university foundations
are also critical. However, if we’re all successful harnessing the vibrant and passionate technology entrepreneur and research base in the state, it will be a transformational success for Florida both in investment and economic terms.