A new Orange County venture-capital fund, launched six months ago during the technology slump, is expected to announce today that it has raised $62 million to invest in fledgling Southern California technology companies.
Although Miramar Venture Capital's effort to secure funding has taken months longer than anticipated and fallen short of its initial $100-million goal, the founding partners still declared the effort a success.
"We have to be realistic about the environment we're in," said Bruce R. Hallett, a managing partner of the Newport Beach venture fund.
The money was raised as technology stocks continued to nose dive, fueling investors' fears of risking further losses.
Indeed, overall venture capital fund-raising throughout the nation shriveled to $9.7 billion in the second quarter from $30.3 billion a year earlier, according to statistics released Monday by data firm Venture Economics.
The environment has become so tough that one venture capital fund, Encore Venture Partners in Santa Monica, closed down earlier this year and abandoned technology investments altogether. Encore had raised $150 million.
In disclosing their plans for Miramar Venture Capital last November, the founding partners had lofty goals--raising $100 million by early this year and eventually bringing in $150 million to invest.
Venture capitalists put money into start-ups hoping for big payoffs when the companies go public or are acquired.
Broadcom Corp. co-founder Henry Samueli provided a powerful lure as Miramar's principal investor, matching funds from other investors dollar for dollar.
With investors questioning technology, and many venture capital funds preoccupied with previous money-losing deals, it's a promising time for Miramar, said Randy Luce, president of Entrepreneurial Investment Corp., which contributed $2 million to the fund.
"When people get nervous, it's typically the best time to invest," Luce said.
Hallett said Miramar expects to make investments in early-stage companies rather than businesses that have run through several rounds of funding, with investments beginning by the end of the quarter.