Florida Growth Fund

Posted by on October 2, 2009 at 10:24 am.

Earlier this week I attended a Florida Venture Forum welcome event for the Florida Growth Fund, a $250 million hybrid fund-of-funds managed by Hamilton Lane for the Florida State Board of Administration. A say “hybrid” because the fund has two missions: 1) invest into Florida-focused venture capital funds and 2) invest directly into Florida companies. It’s not clear how much of the fund will go into each of those buckets, but their investment amounts per deal/fund are roughly $5-15 million.

A couple of the principals from Hamilton Lane spoke at the event, Greg Baty and David Helgerson, and it was very well attended. Both Greg and David are drinking from a firehose at the moment, Florida is a big, diverse geography for venture capital. They are doing a good job of meeting the right folks around southern, central and northern Florida. In parallel, they are also dealing with the logistics of fund creation, including new offices in Ft Lauderdale and Orlando.

Attendance included local entrepreneurs and venture funds from inside and outside Florida. As predicted for years, a pension fund commitment to local venture capital has focused venture fund attention on Florida — pulling venture funds to the event from just about every state in the Southeast, and some beyond. Now that we’ve got the attention, it falls to Greg, David and their team to pick the funds and companies that will drive the best investor returns for FSBA.

Their mandate sounds pretty broad, covering early & later-stage venture capital funds and multiple industries for direct deals. Although they’re after Florida direct deals and looking for funds with a Florida connection, they are not bound to Florida-only funds. For direct deals, they will not lead and price rounds, but would consider following-on up to half of a round. At the event, they announced their first two investments: 1) Voxeo and 2) an unnamed later-stage venture fund.

In my opinion, the hardest part of their mandate will be to balance priority on near-term small wins and long-term results. I was in Tallahassee when the Florida Growth Fund was announced and I remember a media question about “when can we expect results from this FSBA program?” Part of the answer mentioned seeing near-term (3-4 years) “points on the board” — something that historically conflicts with achieving the highest returns from early-stage investing (see chart). Although balancing near-term and long-term expectations is tough, it’s not insurmountable. With stage-diversification and patience, “invest in ourselves” programs like this can deliver great results. Hamilton Lane manages similar programs for multiple states across the country and they seem to understand the value of mixed early-stage and later-stage investments to achieve blended success.

Although their website hasn’t fully launched yet, you can see their splash page at http://www.floridagrowthfund.com/. It includes email and phone contacts. If you learn more from your interactions, share with other Florida entrepreneurs by commenting here…


  • Anthony Richardson @WebFugitive says:

    Dan, thanks for writing about this. It has soaked my curiosity sponge for awhile. Let's hope there is more to report by the time the sponge evaporates 🙂

    Curious about
    (a)what your thoughts are on the "hybrid" model you spoke of
    (b)is Florida late to the game on this ? How many other states already have such funds and what success have they seen ?

  • Kirk says:

    i'm continually amazed at how small the world is— i know Greg Baty from Stanford Business School. He and i played alot of football together. Tell him hello for me.

  • VC Dan says:

    A) I think the hybrid approach is a good way to achieve their goals. Vetting companies and vetting funds take different skillsets, but the flexibility allows them cover their bases in FL. As I mentioned in the post, direct deals allow them to get near-term results, while still harnessing long-term returns via funds.
    B) multiple other states have similar programs, but each one attempts to incorporate lessons learned from the others. Getting Hamilton Lane involed was a good move for the FSBA, because HL brings experience from multiple other state programs.

    @kirk: yes, really small world. Greg and I also had a few different overlaps via industry friends. I'll share that you bragged about owning him on the football field 😉

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