Venture Capital Firm To Launch $11M Fund For Early-Stage Companies

NC IDEA

is expected to close in the near future on a new fund totaling at least $11 million, Chief Executive Officer Dave Rizzo told WRAL.com.

The fund, called Idea Fund I, will close "no later than mid November" and will be used for investments in early stage companies, Rizzo said.

Rizzo disclosed the fund Wednesday while touring the "Tech 2006" show at the McKimmon Center on N.C. State University's campus. The Council for Entrepreneurial Development's annual high-tech showcase included 27 companies demonstrating new and emerging technology.

NC IDEA, which stands for Idea Development for Economic Advancement, is a venture funding and economic development organization that formerly was part of MCNC.

The new fund is part of a shift in strategy for NC IDEA. Idea Fund I, for example, is being set up as a for-profit effort. The four principals of NC IDEA, including Rizzo, will run it, and NC IDEA will be an investor in the new fund.

Funds that were used to launch NC IDEA when it was part of the original MCNC will continue to be used for grants and other programs, Rizzo said.

Working with Rizzo on the new fund are John Cambier, its chief financial officer; Merrette Moore and Lister Delgado.

Creating a for-profit arm of NC IDEA will help the firm draw more interest from outside investors, Rizzo explained.

Early-stage financing has been the focus of NC IDEA, and it has invested in a variety of startups such as web services provider StrikeIron and integrated circuit firm Ziptronix.

NC IDEA also launched a grant program in 2006 that awards up to $50,000 to startups that compete for the funds. Seventy-three companies applied for the initial round, and seven were picked to share $250,000. Another $150,000 in grants will be announced in December.

Asked if NC IDEA's new fund might be used to invest in firms that receive grants, Rizzo replied enthusiastically: "Oh, yea. If it's a good deal, we will fully invest. We will partner with as many as we can."

NC IDEA was formed in 2005 after MCNC sold off its research and development group to RTI International. Another former MCNC division remains as a separate entity, providing networking and other services.