Bull City Venture Partners is the exact opposite of luxury, and its patrons approve

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Bull City Venture Partners is the opposite of screaming. A 20-year-old generic venture capital firm only invests in two to four companies each year. He mainly invests in founders who have been to the block at least once, trying to catch them as early as possible on their new adventure. And from its headquarters in Durham, North Carolina, it primarily invests in East Coast startups located between Philadelphia and Atlanta.

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Investors seem to approve of his deliberate approach. According to the firm’s founder Jason Caplain, the company has just closed a $50 million capital commitment for its fourth fund, roughly double the size of its previous fund, itself a big step up from the firm’s first two funds ($15 million). dollars and 5 million dollars). , respectively).

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This is not the kind of rapid growth that industry observers have been accustomed to seeing in recent years. Kaplan insists that’s the point. “We’re driven by the carry,” he says, referring to the profit the venture capital firm makes from its bets on success. “We’re not asset pickers” who live off management fees.

From the looks of things, Bull City is holding on, having found a slight vacuum in the market at launch. Indeed, Caplain, a Massachusetts native who moved to Durham in the late 90s to work for Red Hat, says he decided to start a venture capital firm in part because Red Hat reached out to investors far away in California (Benchmark and Greylock) before she was closed. public in 1999.

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“Originally, the goal was to create a fund where future Red Hats could raise capital,” says Kaplein, who has received money over the years from Red Hat’s former CEO, COO, head of engineering and head of business development. (Before Red Hat was acquired by IBM in 2019, the company itself invested in the previous Bull City fund.)

Today, the firm remains largely focused on local companies, many of which are created by employees of regional giants such as Epic Games and SAS Institute, a 40-year-old analytics giant that reportedly plans to go public by 2024.

But Kaplen was joined by a longtime partner David Joneswith whom he runs the firm (they also brought on board a newer addition, Michael Lee, last fall) — says the partnership is now more broadly focused on the East Coast and that 10% of the time it invests even further. For example, in 2020 the firm co-led the seed round from LaunchNotes, a San Francisco firm, due to an earlier relationship with its founder, Tyler Davis.

The strategy is paying off, Kaplein says. While the Bull City portfolio has been a while since the portfolio company went public, several years ago it included multi-channel for-profit company ChannelAdvisor (which had an IPO in 2013) and Motricity (which went public in 2010, and a few years later was transformed into another company). after weak results) – many portfolio companies have been acquired in recent years. Among them is Durham-based e-commerce marketplace Spoonflower, which was sold to Shutterfly last August for a listed price. $225 million. Kaplan suggests that Bull City also saw good returns from its 2019 acquisition of VividCortex for performance management to SolarWinds for $117.5 million.

It’s not really that we’re leaning towards more startups based on that momentum. TueWhile the firm just doubled the size of its previous fund, it plans to continue to invest between $250,000 and $2 million in start-ups initially, predominantly in companies that generate at least $25,000 in revenue per month. In addition, from time to time he will withdraw checks from a mature, self-developing company.

In even rarer cases, he will spin a special car. (Caplain says this has been done twice to date.)

The only thread, according to Kaplan, is the founding team, “which makes me want to quit my job and go there,” and who need—and want—the firm’s help in the future.

“We can’t differentiate by check size, so our competitive edge is to be a great partner and ensure that the founders we work with have an incredible experience with us. We want them to recommend us and come back to us when they open their next company.”

Above is the Bull City Venture Partners investment team, which includes (left to right) Michael Lee, Jason Caplain and David Jones.

Credit: techcrunch.com /

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