Venture Capital News

Chicago's Business Leaders Collaborate to Create, Invest and Manage the $10 Million Illinois Innovation Accelerator (i2A) Fund

Monday, the Illinois Innovation Accelerator (i2A) Fund, a $10 million seed-stage, for-profit investment fund, was launched with $6.4 million in capital commitment in its first closing. Seed-stage investing has decreased since the start of the new millennium as investors have moved "up-market," leaving a "capital gap" in their wake. The i2A steps up to the plate as the state's most innovative for-profit, early-stage investment fund.

Structured as a member-managed fund with individual and institutional investors, the i2A Fund will be administered by the Chicagoland Entrepreneurial Center (CEC), a non-profit affiliate of the Chicagoland Chamber of Commerce, with a strong track record in early-stage financing. Notable venture capitalist J.B. Pritzker, of New World Ventures, as well as the Illinois Department of Commerce and Economic Opportunity (DCEO) played an active role as the early catalysts in the formation of the i2A Fund.

The fund wasn't created solely for technology companies, but rather to drive invention across multiple industries. The fund will also invest in consumer product and retail enterprises, new-media start-ups, as well as companies in biotechnology, nanotechnology, cleantechnology and life sciences. The i2A Fund will create a vehicle to support an innovation-based economy. The primary goal of the fund is to provide the first external capital raised by companies headquartered in Illinois, allowing them to expand, as well as provide fund members the opportunity to capitalize on these high-growth opportunities.

Each year, the i2A Investment and Advisory Committees expect to evaluate between 150-200 investment opportunities and invest in four to six companies that are headquartered in Illinois and the surrounding region.

The state's investment comes from DCEO's Illinois Seed/Angel Fund, which is investing in other seed stage venture funds across Illinois. Gov. Rod R. Blagojevich has invested almost $2.7 million from this fund in four Illinois-based venture funds, which are already investing in emerging companies throughout Illinois. These investments not only work to help small businesses expand and create jobs, but will also help to keep these high-growth companies in the state.

The CEC has a great deal of experience in financial transactions, deal syndication (with its CEC Venture Forum) and post-deal development. The organization has assisted entrepreneurs in raising more than $40 million in debt and equity in the past four years with a focus on assisting clients in raising equity capital in amounts ranging from $100,000 to $3 million.

The first close of the i2A Fund included individual investors Michael Ferro, Jr., Bob Geras (chairman of the advisory committee), James Gray, Jules Knapp, Larry Levy, J.B. Pritzker (chairman of investment committee) and Ralph Wanger. Contributing institutions include: Cardinal Growth Corp., Duchossois Technology Partners, the Illinois Department of Commerce and

Economic Opportunitiy, Illinois Institute of Technology, Merrick Ventures, Mesirow Financial, National City Equity Partners and Wexford Science and Technology.

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Austin Ventures Announces Partnership with James Casella

Representatives of Austin Ventures (AV) announced Monday that it has entered into a partnership with James Casella to form Case Interactive Media (CIM). The new company, headquartered in New York, will focus on acquiring and operating businesses in high-growth sectors of business-to-business media and publishing markets. AV has committed a significant amount of equity capital to support management's strategy to build a leading media company through both organic growth and acquisition. Mr. Casella will serve as Chief Executive Officer of CIM.

Prior to forming CIM, Casella served as vice chairman of Reed Business, the world's largest B2B media company, where he focused on the global expansion of Reed's major brands, concentrating primarily on China, India and Russia. Prior to this assignment, Casella served as CEO of Reed Business Information (formerly Cahners) for four years where he provided North American leadership to the print and electronic properties, including Variety, Publishers Weekly, Broadcasting & Cable, and EDN, at a time of significant change. Among his accomplishments, Casella led the successful rebranding of Cahners to Reed Business Information (RBI), led the significant expansion of RBI's Web offerings, and substantially boosted RBI's profitability through operational improvements.

Over the course of Casella's career, he has held numerous other senior leadership roles, including Chief Operating Officer at International Data Group (IDG), President and CEO of PennNet (now PennEnergy), President of ABC Consumer Magazines, a division of Capital Cities/ABC, and Vice President of Sales and Marketing for HBJ Media Systems at Harcourt Brace Jovanovich.

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Cowen Hires Scott Ryles as Vice Chairman

Representatives of Cowen Group, Inc. announced Tuesday the hiring of Scott Ryles as Vice Chairman effective immediately.
Mr. Ryles will be based in San Francisco and will report directly to Greg Malcolm, Executive Vice Chairman.

Ryles has more than 20 years of experience working on Wall Street. Most recently, he was the CEO of Procinea Management, LLC, a firm that develops quantitative investment strategies for investing in intellectual property assets. Prior to his tenure at Procinea, Ryles was the founder, CEO and president of Epoch Partners, Inc., an investment bank formed by three of the largest on-line brokerages (Charles Schwab, TD Waterhouse and Ameritrade) and three leading venture capital firms (Benchmark, Kleiner Perkins and Trident Capital). As CEO of Epoch, in 19 months, Ryles raised more than $75 million of capital, built a team of more than 120 financial and technology professionals, helped originate and execute more than $2 billion of managed equity offerings, and ran the process that led to the acquisition of Epoch by Goldman Sachs for more than $200 million in 2001.

Prior to Epoch, Ryles spent 15 years at Merrill Lynch in various Investment Banking positions including Co-Head of West Coast Investment Banking, Global Head of Natural Resources and Global Head of Technology.

Ryles has originated and executed private placements, IPOs, secondary offerings, convertible securities, and merger and acquisitions for companies in the financial services, utility, natural resources, media, and retailing industries, as well as for private and public technology companies in America, Europe, and Asia. The aggregate value of these transactions exceeded $100 billion. He was a member of the Merrill Lynch Investment Banking Executive Committee for over five years.

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S3 Investment Company Announces Appointment of New Independent Director

Representatives of S3 Investment Company, Inc., a holding company with two subsidiaries doing business in the China market, announced Tuesday that its Board of Directors has appointed Manhong (Mannie) Liu, chairman and chief economist of VCChina Ltd., a global investment and consultation firm based in Beijing, as an independent director of the company. Dr. Liu was appointed to fill the vacancy created by the death of Douglas Perkins, who had served on the Board since January 25, 2006.

In addition to serving as chairman and chief economist, Liu is the founder of VCChina Ltd., whose operations include venture capital investment advisory services, venture capital investment, consulting services, and educational services. Under Liu's leadership, VCChina has become one of the leading companies in China's venture capital market.

Liu has a doctoral degree of economics from Cornell University. She served as research faculty of Harvard University from 1993 to 1997 and is currently professor and Ph.D. student mentor of Renmin University of China. She is also Financial Advisor to the Beijing Municipal Government, Director of Boston China Finance Research Center in the U.S., Director of the VC Research Center of Renmin University of China, and Honorary Vice Director of the VC Association of China.

S3 entered into a twelve-month Director's agreement with Liu. Under terms of the agreement, she is entitled to $2,000 a month for services provided.