Miramar Lures Big Names to New Venture Fund
By RAJIV VYAS
They had timing and market forces working against them. But after six months of road shows, Bruce Hallett and his team hit an initial money-raising target and put their nascent venture fund into place.
Raising money “would have been much easier had we begun early last year,” said Hallett, managing partner at Corona del Mar-based Miramar Venture Partners.
Miramar closed on $62 million in July. Most of the money came from wealthy investors and other venture capitalists.
Since then, Miramar has raised another $13 million.
“We have targeted a total of $100 million before we close the fund in December,” Hallett said.
Miramar formed in January after getting backing from other venture capitalists and from Henry Samueli, chief technology officer and co-chairman of Irvine chipmaker Broadcom Corp.
Hallett and Rick Fink started the firm after the two lawyers left the Irvine office of Brobeck, Phleger and Harrison LLP to become venture capitalists. In February, Bob Holmen, the former general counsel at Long Beach-based First Consulting Group Inc., joined them. Heiner Sussner followed in October, coming from Palo Alto-based private investor H & Q; Asia Pacific Ltd.
With no track record, Miramar has been able to raise money at a time when established venture firms are finding it difficult to convince institutional and individual investors to back them.
What sold investors were the backgrounds of Miramar’s partners, according to Hallett. The four have more than 12 years of combined experience in venture investing and solid reputations from their previous firms.
From 1998 until late 2000, Hallett and Fink oversaw investing of Brobeck funds in venture rounds in client companies.
The fund had an annual internal rate of return in the triple digits during the three years, Hallett said.
Miramar hasn’t made any investments yet but plans to fund early-stage technology companies. Southern California startups are expected to get most of the money. While the firm also has a second office in San Diego, biotechnology and other healthcare companies aren’t in the mix, the partners said.
“San Diego has abundance of strong technology companies,” Hallett said.
Fink said he plans to work from the San Diego office as well as Orange County.
Miramar is the latest addition to a growing list of OC-based venture capital firms. Including Miramar, some eight OC-based firms or those with offices here have raised more than $900 million in the past 18 months or so.
Hallett said that while convincing investors was more difficult this year, Miramar benefits from starting with a new portfolio of companies, unlike other firms that are backing money-losing companies.
“The tradeoff is that we are starting to invest at a time when valuations have come to a more reasonable level,” he said. “Between investing at higher valuations and raising funds in a difficult market, I would opt for the latter.”
Miramar has lured key individual investors to its fund.
Broadcom’s Samueli is the biggest backer of Hallett and his team. According to Miramar, Samueli is matching the firm’s amount raised with an investment from his personal money.
Hallett said Miramar was born out of a talk with Samueli about creating “a robust VC community in Southern California.”
After getting Samueli’s financial support, Hallett said he and Fink decided to set up a fund focused on investing in the Southland.
Bob Hoff, general partner at the Irvine office of Woodside-based Crosspoint Venture Partners, also has invested his own money in Miramar’s fund.
Other investors include San Bruno-based technology investor Vantage Point Venture Partners, Irvine-based real estate company Sares-Regis Group and Entrepreneurial Corporate Capital, an OC-based venture investor.
