Incubating,starting and nurturing companies from an idea up,isn’t normally the province of venture capital firms.
But Corona del Mar’s Miramar Venture Partners LP is willing to take a stab at it.
Miramar, which invests in early stage startups, last month hired Armond Hairapetian away from Irvine chipmaker Broadcom Corp.
Hairapetian cofounded Irvine chip designer NewPort Communications Group Inc., which Broadcom bought in 2000.
According to partner Bruce Hallett, Miramar isn’t looking to go full bore into incubating like Pasadena’s IdeaLab, or Odetics Inc., which now is known as Iteris Holdings Inc. in Anaheim.
But it is looking for Hairapetian to “form new companies around specific product plans and technologies,” according to a press release.
He’ll have typical venture capital duties, too, including looking at business plans and analyzing markets, the firm said.
The move marks a slight shift for Miramar, which got its start in 2001 with investments from other OC venture capitalists as well as Broadcom cofounder Henry Samueli.
So far, Miramar has made typical venture deals, funding companies that have come to the firm with their own ideas and products. They include Irvine chip designer SolarFlare Communications Inc. and Atkino Inc., a designer of telecommunications gear in Irvine.
Officially, Hairapetian joins Miramar as “entrepreneur-in-residence,” someone who can act as a chief executive to young companies, providing operational and strategic expertise.
There are a lot of ideas for how Miramar could use Hairapetian.
He could come up with ideas for chip designs, like he did at NewPort and Broadcom, Hallett said.
“Another situation could be a case of founders who are more technical and really could use a ground collaborator to help them refine their product strategy,” he said.
Entrepreneurs in residence have been around for a while at venture capital firms. They usually step in as more seasoned hands at portfolio companies started by rag-tag entrepreneurs or inventors.
Legendary Silicon Valley venture capital firm Kleiner Perkins Caufield & Byers pioneered entrepreneurs in residence in the 1980s. Other venture capital firms followed suit in the boom years of the 1990s.
Miramar seems to be going beyond what others typically do with entrepreneurs in residence, said Emily Mendell, director of public affairs for the National Venture Capital Association in Arlington, Va.
“It’s just unusual for a firm to actually start the company,” she said.
Miramar doesn’t plan to stop doing traditional venture deals, Hallett said.
“I don’t think it represents a change so much as an addition to what we’re doing,” he said. “We’re still going to invest in high-quality companies.”
Miramar could be out to speed up the investment process, according to a fellow venture capitalist.
“You can be proactive or not,” said Randy Lunn, who heads the Irvine office of Santa Monica-based Palomar Ventures. “There are three ways to get deals. One is just a good market opportunity. Two is to have a good product or technology. And three is to have a good management team. An (entrepreneur-in-residence) falls into the last category.”
Miramar itself has been a unique startup. Hallett and San Diego-based partner Rick Fink are former partners at the Irvine office of now-defunct San Francisco law firm Brobeck, Phleger and Harrison LLP. They left to form Miramar a year before Brobeck dissolved.
Soon after, they brought on Bob Holman, the former general counsel at Long Beach-based First Consulting Group Inc., and Heiner Sussner, who worked with private investor H & Q; Asia Pacific Ltd. in Palo Alto.
Miramar was able to raise money in 2001, just as technology,and venture funding,was tanking and established venture firms were finding it hard to convince institutional and individual investors to back them.
All told, Miramar is said to have raised nearly $100 million, though the partners won’t reveal how much.
From 1998 until late 2000, Hallett and Fink oversaw investing of Brobeck money in client companies that were raising venture capital.
The Brobeck fund had an annual internal rate of return in the triple digits during those three years, Hallett said. Miramar came about after a talk between Hallett and Samueli, Broadcom’s chairman and chief technical officer, about creating “a robust VC community in Southern California,” according to a 2001 interview.
The firm also drew money from another big investor here, Duane Roberts, who made his initial fortune in frozen burritos and put money in Miramar via his Entrepreneurial Capital investment firm.
Bob Hoff, general partner at the Irvine office of Woodside-based Crosspoint Venture Partners, has invested some of his own money in Miramar’s fund.
Other investors include San Bruno-based technology investor Vantage Point Venture Partners and Irvine-based real estate company Sares-Regis Group.
