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  Defining the Opportunity | Investment Focus    

Drop Cap Letter The Athenaeum Fund is a venture capital limited partnership committed to generating superior capital gains for its investors by providing seed funding, management, and marketing skills to start-up companies.

The Athenaeum Fund was conceived and formed in Pasadena in the entrepreneurial environment of The California Institute of Technology, the Jet Propulsion Laboratory and Pasadena's biotech corridor. This area of Southern California contains a significant pool of highly talented, unusually bright and energetic individuals whose ideas have sometimes been overlooked by the larger sources of capital.

The Fund was designed to fill the gap in the sources of funding needed by the Southern California entrepreneurial community. It provides the seed capital necessary to develop businesses to the point that they are able to attract investment from the larger venture capital firms and institutional investors. The Fund will also continually explore partnering with larger venture capital firms to facilitate meeting the needs of portfolio companies for follow-on financing as it becomes necessary.

The current Management Team, comprised of Dr. Philippe Adam, Dr. John Baldeschwieler and Malcolm Cloyd, has a distinctive blend of start-up experience, business skills and investment experience. The Fund's Managers are significantly involved with entrepreneurial activities throughout Southern California. These activities include entrepreneurial studies at Caltech, serving on local advisory boards and participation in venture capital and angel funds. Participation in these activities provides insight to new technologies, products and services that are in the early stages of development.

Although Caltech is not involved with the Fund in any way, the Fund is named after the Athenaeum on the Caltech campus. The Athenaeum was built in 1930 to promote social, cultural and intellectual exchange, and it is where the Fund's Management Team first discussed and formulated the idea of The Athenaeum Fund in 1999.

The Athenaeum Funds I, II and III are closed and have invested in start-ups covering a variety of technologies and markets with several succesful exits. The current Athenaeum Fund IV has been recently launched in response to investor demand and to capitalize on the steady stream of high quality deal flow available to the Fund's Managers.

Defining the Opportunity

An investment in the early stages of a successful company has the potential to provide the greatest return relative to follow-on investments because the early stock is typically issued at lower prices to reflect the risk inherent in such early stage investments. As a portfolio company successfully matures, the decline in risk should result in an increase in value.

In the economic model for The Athenaeum Fund, the success of only a few investments could determine the degree of financial success of the entire Fund. The Management Team intends to maximize returns to the Fund through the potentially larger returns from early stage investments, and their investment decision process is designed to manage risk and limit exposure to the inevitable failure of some start-ups.

The Fund differs from larger venture capital firms who, many times, have ratios of up to $35 million of committed capital per professional. This inhibits routine investments of less than $3 million in start-up companies. The Managers believe that there are a large number of entrepreneurs with quality business plans who are without a source of capital to get their businesses established well enough to attract the attention of the larger venture capital firms. The Athenaeum Fund will focus on start-up companies with initial capital needs of approximately $250,000 to $500,000 who will benefit significantly from the support and mentoring which the Management Team will provide. The Fund's size and focus have been established to meet this need.

The Fund's committed capital will provide accessibility, organization, responsiveness and investment stamina. The Management Team's ability and focus on company building will provide leadership for continued growth and follow-on financings.

Investment Focus

The Fund has invested in start-up companies with a wide range of new technologies incorporated into products and services. The Management Team is confident that a diversity of technologies and markets will benefit the Fund's performance.

The Fund anticipates investing in many companies who are associated with Caltech, the Jet Propulsion Laboratory, Pasadena's Biotech Corridor, and other major university research laboratories such as UCLA, USC, UCI, and the Keck Graduate Institute.

Disclaimers & Credits