Cove Fund II, LLC closed its first round at the end of January at $12.6 million, Co-Manager Mike Benvenuti told OC Startups Now in mid-February. Benvenuti is one of the fund’s three investment managers.
The fund has until the end of April to close its second round. The goal is to get to 99 investors or $15 million, whichever happens first. “I would anticipate that we will – by the time our second round closes – have 99,” Benvenuti said.
This fund follows in the footsteps of OC Cove Fund I; the first one raised a total of $ 5.6 million from private and institutional sources with a three-year deadline for outlays. The goal was 20 to 25 investments. It’s made 16 to date. The average investment has been $250,000. Cove Fund I managers expect to make a handful more investments as the fund fully deploys of all its investable assets. The amount remaining is confidential, said John Kensey, one of that fund’s three managers.
Cove Fund I was a seed fund. Cove Fund II managers will focus on seed and follow-on investments. Approximately half of the second fund will be invested in seed-stage startups, with the remaining funds being used for follow-on investments for the best performers. The average investment in any startup – including the initial and follow-on amounts – will be between $500,000 and $750,000, Benvenuti said.
Cove Fund II managers will begin investing in startups in early Q2, with a focus on tech and life sciences. While the Cove Fund 1 only invested in OC-based startups, the sequel will target SoCal’s eight counties, plus all the UC schools throughout the state. That includes IP and startup teams coming out of these schools, Benvenuti said.
The other managers of the Cove Fund II are Paul Voois and Howard Mirowitz. Both Cove funds have their HQ at the Cove, the physical space of Applied Innovation, UCI’s innovation center.