Florida Opportunity Fund

Posted by on January 6, 2009 at 8:13 am.

florida opportunity fundDespite 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.

2 Comments

  • Delena D. says:

    Dan- My apologies for inserting this length inquiry in your forum, but I am leaning towards desperation and uncertainty and need some intense guidance! I am an entrepreneur (12 year biz owner venturing in a new and unfamiliar direction)in the Florida panhandle that has created and developed a unique and first-of-its-kind service /business and have recently submitted my first VC inquiry and proposal to a south Florida VC–but much to my dismay, I have received no response(after 4 follow-ups) . Please advise me on the following if you will: 1.How long should one pursue a firm? 2.How many should one pursue at one time (while worried about risking over exposing the intellectual property and idea concept and 3. Are there any websites that disclose the type of businesses that VC specialize in? ANY and all information will be greatly appreciated . Thank you very much.

    Cheers, Delena D.

  • VC Dan says:

    @Delena: I hope these answers help:
    1) I would recommend pursuing firms that are a match for as long as you need funding. The best entrepreneurs are "persistent but polite" whereby they follow-up regularly to move their opportunity to the top of the pile until they get a final yes/no. The entrepreneur that does this well has the best shot of getting a VC's attention and, at the least, getting timely guidance.
    2) I'm not big on hiding your ideas. I recommend talking to as many quality people (know who you're approaching) as possible to hear the objections and iteratively improve. It's the rare case, even if they took an idea, where someone beats a top entrepreneur's passion and execution. This mindset does change slightly after you receive some Series A funding. In general Series B and Series C discussions are held with a smaller group of investors to add to existing insider interest.
    3) Most VC websites describe the type of industries and businesses they're looking for. In general you'll find most VCs have a bias towards businesses based upon proprietary technology, huge markets and highly scalable models. For example, service-based businesses that require people to bill against are not nearly as scalable as a new medical device or cleantech innovation.

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