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…