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Minority Firms Near Deals in Venture Capital Pilot Program

July 22, 1998|LEE ROMNEY

Two venture capital firms selected by Merrill Lynch to manage a $5-million equity investment fund for minority businesses here are moving toward closing their first deals and seeking other recipients.

Fulcrum Venture Capital Corp. of Culver City is nearing closure on a deal with an East Los Angeles manufacturing firm, and Inroads Capital Partners of Evanston, Ill., is finalizing a deal with a software development firm now moving from Burbank to Irvine, officials with the venture capital firms said Tuesday. Each firm will manage $2.5 million of the fund.

The firms were chosen by a team of community leaders headed by UCLA's Harold Price Center for Entrepreneurial Studies. The selection of the firms sets an important piece of Merrill Lynch's $77 million Southern California Partnership for Economic Achievement in motion.

The three-year pilot program--announced nearly two years ago--was designed to open financial markets to African American, Asian and Latino communities in Los Angeles and Orange counties.

In addition to the equity investment fund, the money is going to small-business loans, mortgage loans, funding for affordable-housing developments, investment seminars in languages other than English, financial planning forums and grants to community-based organizations.

The venture capital firms are generally looking for businesses with at least $2 million in annual revenue. They will match the Merrill Lynch investment dollar for dollar, said Fulcrum President Brian E. Argrett.

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