Thursday, March 6, 2008

.406 Ventures closes first fund at $167M

Boston-based .406 Ventures LLC has closed its first fund with $167 million in committed capital nearly a year after seeking to raise a fund.

Co-founder and managing director Larry Begley said the fund size exceeded its goal of $150 million because limited partners were impressed with the operational experience and focus of Begley and co-founders Maria Cirino and Liam Donohue.

"They can see the value we're adding," Begley said.

Cirino is the former CEO of Guardant Inc., a Waltham managed security firm bought by VeriSign Inc. in 2003 for $140 million. Begley was previously CFO of Cambridge-based ThingMagic Inc.; Donohue was previously a general partner at Boston VC firm Arcadia Partners.

The trio started .406 Ventures in August 2005 by investing $3 million of their own money in seven tech companies. Begley said the "seed portfolio" was instrumental in fundraising, which started in March 2006.

"It was a sign (to limited partners) that we could build a portfolio," he said.

Begley said .406 Ventures investments will all be early-stage tech companies that deal in information security, tech-enabled services or next generation software.

Begley said .406 has nine companies in its portfolio, all in the Boston area. He expects to consider investments outside New England, but said that most portfolio companies will be locally based.

Begley was noncommittal when asked about the timing of future funds. But he said he expects several additional funds as the firm establishes itself in Boston. "We intend to build a brand here," he said.