Venture profile: Kitty Hawk Capital Has Cash and Broad Areas of Interest for Investment

CHARLOTTE — Editor's note: This is the 13th in Local tech Wire's series profiling venture capital and investment funds that operate in the Carolinas. The series was prepared by Daniel Pearson and Matthew Burns. The oldest venture capital firm in North Carolina, 22-year-old Kitty Hawk Capital began financing young technology companies about the same time that the personal computer revolutionized the tech industry.

The Charlotte firm has about $100 million under management, including its current $42 million fund.

The portfolio is more diversified than most venture funds in the region, going beyond the typical information technology and life sciences firms to include investments in a Winston-Salem wrapping paper distributor, a Texas bank holding company and a New Jersey consolidator of scrap metal collection firms. IT and biotech firms in the portfolio have included Biolex, Celotek and TechTrain.

Kitty Hawk is the lead or co-lead investor in about two-thirds of its deals, typically investing up to $3 million per round, and its goal is to achieve an exit within six years. The firm places a premium on the quality of the management team, including business and personal reputations and the ability to be flexible in meeting the challenges of building a quality growth company

Here's the skinny:

Featured Firm: Kitty Hawk Capital

Mailing address:

2700 Coltsgate Road, Suite 202 Charlotte, North Carolina 28211

Phone number: (704)362-3909

Web site: www.kittyhawkcapital.com

Management Team:

Walter H. Wilkinson, Jr. W. Chris Hegele Lawrence D. Gladstone

Focus of firm:

Primarily focus is the southeast. Concentrate on early stage and expansion financing for rapidly-growing private companies.

Size of current fund: $42 million

Money under management: $100 million in four venture capital funds

How many of those dollars have been invested: $30 million from current fund.

Companies funded in 2001: 2

Companies funded over the last five years (amount and round for each co.):

2001: Knology and Trinity Convergence, Inc. 2000: LightWave Communications; NetOctave; Tech Train. 1999: Allegheny Child Care Academy; ScoreBoard; Cammunications. 1998: Biolex, Inc.; AviGenics, Inc., Wrap-It; Cogent Neuroscience, Inc.; Metalico. 1997: DEKA Medical, Inc.; US Orthopedics; SpectraSite Communications

How many new deals do you expect to fund in 2002: Undetermined

In what size range: Between $500,000 and $3,000,000 in each portfolio company and up to $25 million

Sweet Spot (types of deals, stage of the company): We offer advice and assistance in areas of business strategy, market strategy, financial planning, and recruiting key members of management. We can assist in obtaining additional financing in the form of bank loans, leasing, or additional rounds of venture capital financing.

Most important attributes for companies seeking funding: We place a premium on the quality of the management team as measured by professional skills, previous performance, business and personal reputations and the ability to be flexible in meeting the many challenges of building a quality growth company. We look for management that wants to establish a close working relationship with Kitty Hawk to build value in the company.

What differentiates you: Our skill and experience become a significant contributor to the success of our portfolio companies. Our experience enables us to provide the "hands-on" expertise necessary to create value in young, growing companies.

Thursday's profile: North Carolina Enterprise Fund

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