Washington, D.C.-based venture capital firm Grotech Ventures closed a fund worth $225 million in committed capital Monday and is eager to invest some of it in Charlotte startups.
“We’re certainly going to be looking aggressively for companies to back in the Charlotte area,” said Don Rainey, a general partner at Grotech. “All the indications are that we’ll find some to back there.”
Grotech is known for investing early in high-potential technology companies. Rainey, 53, was one of the early investors in daily deal site LivingSocial, which launched in 2008, and he’s been involved in startup communities along the East Coast for more than 25 years.
Because of the potential he’s seen in the local startup community, Rainey and his wife are moving their six children from Washington to Cornelius next month.
Rainey says Grotech is considering startups in Charlotte, Washington, D.C., Atlanta and Denver.
It has committed funds from the $225 million to 12 companies so far. None of those is in Charlotte, but Rainey said the process of determining companies to invest in will probably take two to three years.
“How much goes where really depends on the great companies we find,” Rainey said.
Grotech is looking for high-potential, growing tech companies. Generally, the firm invests in companies that have a finished or nearly finished product but haven’t yet made sales.
The latest fund brings the firm’s total capital under management to $1.3 billion.
Rainey said he’s been getting to know leaders in the Charlotte-area startup ecosystem, “trying to plant our flags in there.”
He says he’s met with Dan Roselli, founder of uptown startup hub Packard Place and some local angel investors.
He said he’s also met with local tech startups AddShoppers and Sweet Relish.
AddShoppers is an analytics tool that shows businesses which social networks are driving the most sales.
Sweet Relish is a tool that allows online shoppers to create lists, browse and buy.
Rainey says he expects the local startup scene to succeed in what he calls the “native expertise” of the area.
“This is a city with a great banking industry, so what do people learn? Data protection, financial advising, payment technology, general computer security,” Rainey told the Observer in March.
Rainey was a judge in the finals of the May 1 Charlotte Venture Challenge, a months-long startup competition through UNC Charlotte with a $50,000 grand prize. He also was a panelist during the Southeast Venture Conference in March, where more than 600 entrepreneurs and investors gathered in Charlotte to showcase the region’s most promising tech startups.
McMillan: 704-358-6045; Twitter: @cbmcmillan
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