A venture capital fund developed to support Oklahoma-based
companies is expected to post $10.1 million in total deposits from
investors when it is closed Aug. 14, Quinton Ellis, Oklahoma City
resident vice president of Merrill Lynch, Pierce, Fenner & Smith
ML Venture Capital Partners, a Limited Partnership, barely met
its minimum $10 million funding requirement, but Ellis is certain
the fund will support the 12 to 14 investments initially planned.
"I am happy that we got the deal done," Ellis said. "It's just a
start, but we have started."
The first of those investments could be funded within the next
60 to 90 days, said Joseph Tippens, vice president of Merrill Lynch
Venture Capital Inc. The firm will take about 2 to 2 1/2 years to
fully invest this fund, he said.
Investigative work has begun on 10 to 12 business plans
harvested from the first crop received by the fund, Tippens said.
"There are a couple of transactions we've been working on very
hard," Tippens said. "Unless something happens to change our minds,
we will do at least one, if not both, of them."
"We'll do the first deal within the next 60 to 90 days."
Tippens expects himself and the other three managing partners of
Venture Capital Partners to spend between 200 and 500 hours on each
project, examining the proposed business' market, its size, dynamics
and competition, where the company's products or services fit in the
market, what its strategic plan is, and who the people are that will
operate it. Other Merrill Lynch resources can be called in to
review specific business plan areas, he said.
The people submitting the business plans are looking for
non-bankable, or risk, capital and investors who provide a
value-added presense," Tippens said.
"In addition to the money, we bring alot of resources to the
table to help them build their companies," Tippens said.
The fund wants to invest in programs where it can be involved
and become value-added investors and manage the risk in those
"The level of activity varies wildly by the style of deal,"
The fund is investing in a management team, and is supplying "a
laundry list of resources for that management team to lean on to
execute their business plan," Tippens said.
The fund's managers offer strategic assistance and sits on the
company's board of directors, he said. They are not day-to-day
managers, he said.
For the average four-to-five years that the venture capital fund
would be involved in a particular project, the fund would be treated
as a partner in the business with the management team and would own
equity in the company alongside the management team, Tippens said.
"It does not do us any good to buy low and never sell," Tippens
said. "Every deal we do has an exit plan - how to get out of the deal
and give the gains to our partners (the investors). …