Cove Fund II, LLC is a seed stage venture capital fund that aims to provide investment opportunities and return to qualified investors that wish to participate in the burgeoning Southern California technology sector.
Over a period of approximately four years, Cove Fund II will invest in 20 to 25 seed stage companies located (either headquartered or carrying out main operations) in Southern California. The Fund's focus will be on technology and life science opportunities that are rapidly scalable and where the initial funding will get the company to an important inflection point. The Fund will seek to syndicate its deals with early stage venture capital funds, angel networks and other qualified investors. The Fund will typically lead its deal syndicates, but will participate as a follower given the right circumstances.
FUND SIZE AND SOURCES
Cove Fund II has raised $14.2 million from both private and institutional sources, largely from Southern California. The Fund's members (investors) include successful entrepreneurs, local business people, family offices and others who recognize the investment opportunity offered by the dynamic Southern California startup community.
Cove Fund II is a California limited liability company managed by Cove II Management, LLC (the "Manager"), which has three principals: Mike Benvenuti, Howard Mirowitz and Paul Voois. The Fund is highly member-driven, with its members playing an active role in deal flow sourcing, due diligence, recommending investments to the Manager, and mentoring and governance of portfolio companies. An Advisory Board comprised of experienced executives, entrepreneurs and early stage investors and drawn primarily from the Fund's members advises the Fund and the Manager. The Fund's initial closing was on January 31, 2018.
Cove Fund II's charter is to invest "seed" capital in early-stage companies that are:
- Headquartered or carrying out main operations in Southern California, and
- Engaged in the commercialization of innovations in technology and life sciences, and
- Rapidly scalable, where the initial funding will get the company to an important inflection point.
The Fund will also invest seed capital in early-stage companies affiliated with the University of California, even if outside Southern California.
The Fund will seek opportunities in which a strong leadership team is in place to guide development of the core technology, product and/or service, and to build the organization needed to realize the company's significant market potential. The core technology must offer substantial and sustainable differentiation and barriers to entry. Ultimately, the Fund's goal is to support those companies that can successfully grow to a level where venture capital funds are attracted to provide the significant additional capital needed for full market commercialization at significant incremental valuations. In brief, the Fund's focus when evaluating companies for investment will be "Team, Technology and Market".
Cove Fund II will offer the investor the ability to invest in a carefully selected pool of Southern California sourced companies with high growth potential that have been thoroughly vetted before investment and then subsequently guided by experienced investors/entrepreneurs (members of the Investment Committee) who will likely continue to serve as company board members or advisors. Additionally, the Fund will benefit UCI Applied Innovation by attracting venture capital, dynamic early stage companies, passionate entrepreneurs and committed investors and mentors to its ecosystem.