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New venture fund raises $167m

Entrepreneurs to share talents with start-ups

Email|Print| Text size + By Robert Weisman
Globe Staff / March 6, 2008

A pair of well-known area technology entrepreneurs has teamed up with a venture capitalist to raise $167 million from some big-league financial investors for a new Boston venture fund that will bankroll data security, open source software, and other high-tech start-ups.

The fund, which closed this week, was the first raised by .406 Ventures, a two-year-old venture firm named after Red Sox slugger Ted Williams's batting average in 1941.

It is one of the few firms started in recent years, as many traditional venture capital firms have been moving toward larger funding rounds and later-stage investing.

It's also unusual because two of the three .406 founders were hands-on company operators without previous investing experience. They plan to arrange funding rounds of $500,000 to $4 million, much smaller than the typical financing by established venture firms.

"We're focusing on back-to-basics, meat-and-potatoes, early-stage technology investments," said managing director Maria Cirino, who founded .406 Ventures with fellow high-tech veteran Larry Begley and venture investor Liam Donahue.

The firm, which has been quietly raising money and making selective investments over the past 18 months, has enlisted prominent financial firms like JPMorgan Chase & Co., Credit Suisse Group, and Invesco Ltd., as well as other limited partners such as the Washington University endowment and the Rhode Island pension fund, for its fund. The firm planned to raise $150 million but was oversubscribed.

Robin Painter, who leads the private equity fund group for the international law firm Proskauer Rose, said her firm arranged closings for 111 funds totaling $29 billion in committed capital globally last year. Of those, she said, fewer than a dozen were from new venture firms.

"It's a pretty hard market to break into, particularly here in the Boston area," Painter said. "There are a lot of established firms here. To raise this money for an early-stage tech fund is quite a feat."

Cirino previously cofounded Guardent, a Waltham information security company acquired by VeriSign Inc., and other companies. Begley has been a senior executive at a number of area technology companies, including ThingMagic, a maker of RFID reader software. Both have promised to be actively involved in mentoring the entrepreneurs at start-up companies in which .406 Ventures invests.

The firm's partners see its name as a metaphor for their style of selective investing, Cirino said. "Ted Williams was a scientific hitter," she said. "He didn't swing at everything. As a result, he achieved a batting average in 1941 that hasn't been equaled since."

Robert Weisman can be reached at weisman@globe.com.

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