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Boston office of Russian Venture Company is raising new $200 million fund to back Russo-American businesses

Posted by Scott Kirsner  March 21, 2013 08:00 AM

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Just a little over a year after opening an office in Boston, the Russian Venture Company's U.S. arm is thick into the work of raising a $200 million fund.

That's a big change for RVC-USA, as it is known, which so far has operated on a $2 million annual budget to "do outreach" to the venture capital and entrepreneurial communities here, in the words of CEO Axel Tillmann, which includes trying to persuade U.S. venture capital firms to put money into Russian businesses seeking to establish a foothold in the U.S. "In working with VC firms, what you always hear is, 'If someone else is willing to take the lead, I'll do it. There's often that 'you go first' attitude," Tillmann says. "So if I as RVC can lead a deal," that may create momentum that will help a funding round come together.

Tillmann says that he's an admirer of the Israeli model, where companies operate an R&D office in Israel but hire a CEO and sales and marketing staffers in the States to reach customers here. The new RVC Partners fund he's planning would invest in those sorts of companies, or U.S.-bred start-ups interested in building, say, a software development or engineering team in Russia. "There has to be a Russian angle," says Tillmann, a native of Germany. He expects the Russian government to contribute about $20 million to the new fund, with the rest coming from investors around the world. (The government portion hasn't yet been approved.) Tillmann says he has "soft commitments" for about $100 million so far, but hopes to be done raising the fund sometime this year. He says he has already identified several partners he'd bring on to help make investments, but wasn't yet ready to name them.

Tillmann mentions Net-Gen as the kind of business he'd like to see the new fund backing; the construction-related software company, based in Novosibirsk, participated in the MassChallenge competition in Boston last year. His says his hope is that once RVC Partners chalks up a few wins, that "may persuade other VCs to go into Russia."

When I spoke with Tillman on Monday, he'd just come back from a "Destination Moscow Roadshow" event in Boston.

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Scott Kirsner was part of the team that launched Boston.com in 1995, and has been writing a column for the Globe since 2000. His work has also appeared in Wired, Fast Company, The New York Times, BusinessWeek, Newsweek, and Variety. Scott is also the author of the books "Fans, Friends & Followers" and "Inventing the Movies," was the editor of "The Convergence Guide: Life Sciences in New England," and was a contributor to "The Good City: Writers Explore 21st Century Boston." Scott also helps organize several local events on entrepreneurship, including the Nantucket Conference and Future Forward. Here's some background on how Scott decides what to cover, and how to pitch him a story idea.

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