Vinny Smith knows how to make a mark in business.
Now he’s focusing on a bigger endgame with far more societal impact.
The founder of Orange County’s largest venture capital firm said he’ll donate half the profits from his expanding portfolio at Newport Beach-based Toba Capital to charity causes and foundations this year and beyond.
“Half the benefits are flowing through to charity, which I think is just a cool thing and different,” he told the Business Journal last week in an exclusive interview. “I’m not planning on doing it just this year. It’s from now on.”
Smith has grown Toba to an $800 million evergreen fund since its launch in late 2012. He said he hopes others in wealthy circles take notice—and action.
“I haven’t heard of anyone else doing this,” said Smith, ranked 15th on our annual OC’s Wealthiest list (see stand-alone Special Report) with an estimated $1.5 billion. “It gives me motivation to continue to work and be excited about working.”
Smith launched Toba after netting nearly $1 billion in March 2012 from the $2.8 billion sale of his Quest Software in Aliso Viejo to Dell Inc. The fund has invested about $600 million in more than 40 companies and has several big exits to its name, helping to build his foundation and charitable giving.
He said his annual giving could hit hundreds of millions based on the continued growth of the fund and successful investments.
Toba invested $6 million in Alteryx Inc. and had a 6% stake after the Aliso Viejo-based analytics software maker raised $114 million in proceeds in a March initial public offering, the first in OC since June 2015, when Glaukos Corp. in San Clemente raised about $188 million, and the first local tech IPO since December 2013, when Irvine-based Kofax Inc. raised $11 million after years on the London stock exchange.
Alteryx’ market value has increased from about $800 million since the IPO to $1.2 billion.
Other Toba exits include Codenvy, which was acquired on undisclosed terms in May by Red Hat Inc. in Raleigh, N.C. Toba led a $9 million financing round in 2013 for the San Francisco-based software maker, which provides cloud-based services to code, build and test apps. It also backed SmartBear Software Inc., a Massachusetts company that sold a majority stake in May to private equity firm Francisco Partners for about $500 million.
Toba had a stake in TerraForm Global Inc., a wind and solar farm operator in Maryland that agreed to a $787 million cash sale in March to Brookfield Asset Management Inc.
“The solar investment fits into our strategy where we seek returns but also seek to improve things like cleaner power generation, improved and healthier food and drink options, and better tools for education and training,” Smith said.
Call it an extension of “impact investing,” a growing interest the Business Journal chronicled about a year ago that’s taking root at his private foundation, Teach a Man to Fish, which had a separate $2 million stake in Alteryx.
The foundation is projected to surpass $100 million under management this year.
Smith and his foundation support over 100 charities, including Orphan Starfish, which provides after-school training in orphanages and shelters in 25 Latin American locations and the Philippines.
Education and children causes are also near and dear to Dale and Sarah Fowler, big donors at Chapman University, Gordon College in Wenham, Mass., and Young Life Ministries on both coasts, among others.
“We like to invest where young people are benefiting,” Dale told the Business Journal last week.
The longtime area real estate investor, who’s better known locally for his charity work, is the 35th wealthiest in OC, with a net worth of about $400 million.
The couple made a $45 million pledge in February to Chapman to help establish an engineering school.
“It’s meant a lot to Orange County and a lot to my family,” said Dale Fowler, a Chapman graduate along with his children. “We think higher education, if it’s well-managed, is a good investment,”
The recent pledge followed a $55 million donation three years ago for Chapman’s law school, which was renamed the Dale E. Fowler School of Law.
Chapman said at the time that it was the second-largest gift ever to a U.S. law school.
The Fowlers gave $60 million in 2007 to Gordon College, where three of their grandchildren have attended.
They said they want their philanthropic endeavors to provide a foundation for a better tomorrow.
“We felt like doing something that would outlive us by many generations,” Dale Fowler said.
It’s a sentiment shared by many on our annual list of the wealthiest OCers, including Henry Samueli, No. 2 on this year’s ranking with an estimated net worth $4.3 billion.
He and his wife, Susan, have long been active in philanthropy through the Corona del Mar-based Samueli Foundation, along with other efforts.
The foundation gave an additional $20 million in April to the Henry Samueli School of Engineering and Applied Sciences at University of California-Los Angeles and $30 million to the University of California-Irvine to help build a 100,000-square-foot facility for cross-disciplinary research in engineering, computing and physical sciences.
The Broadcom co-founder and Anaheim Ducks owner signed Bill Gates and Warren Buffett’s Giving Pledge in 2012. It tries to recruit super-wealthy people to give a significant portion of their fortunes to philanthropic efforts.
The billionaires who’ve signed the pledge now number 170, including Facebook founder Mark Zuckerberg and Elon Musk, founder of Palo Alto-based luxury electric vehicle maker Tesla Motors Inc. and Hawthorne-based Space Exploration Technologies Corp.
Smith commends those efforts but has a different take.
“I want to do stuff while I’m still alive and make good investments in charity with good outcomes,” he said. “I think it’s positive for our team and for the people we invest with. They get really excited about this.”
