Most people outside the venture capital community hadn’t heard of TMCT Ventures until all the news coverage of last week’s agreement by Times Mirror Co. to be acquired by Tribune Co. But the fund is in the process of getting a much higher profile.
Headed by Tom Unterman, the man who effectively brokered the Tribune-Times Mirror deal, the $550 million fund has stayed out of the limelight since it was founded last September with funds from Times Mirror and the Chandler family trusts.
The fund’s partners are now trying to increase its visibility, while seeking to distance themselves from Times Mirror.
“(The fund’s managers) are very well known, but they’ve been more behind the scenes,” said Jeff Anderson, managing director at Mellon Ventures Inc. “They’re breaking out of the shadow of Times Mirror and I think that’s a real plus for them and their deal-making capabilities. By distancing themselves, they still have the connections but can operate with a little more flexibility and a little more autonomy, which I think will be great for their business.”
At the behest of the Chandler family, majority owners of Times Mirror, Unterman set up TMCT Ventures last fall. The fund is focused on investing in business-to-business, e-commerce and selected business-to-consumer Internet companies, according to TMCT partner Michael Song.
Looking for leaders
So far, TMCT has invested $150 million in about 25 companies, most of them based in Southern California. They include such well-known Internet players as car pricing and purchase site CarsDirect.com, online tech and customer support firm PeopleSupport.com, and business-to-business marketplace BizBuyer.com.
The fund’s five partners look to invest in companies that will be leaders, either number one or two in markets of at least $1 billion, with potential to capture at least 10 percent of that market in revenues within a few years.
Members of the Chandler family are involved in the venture fund, but leave the details to Unterman and his partners in the Rustic Canyon Group, which manages the fund. Family members are officially updated on the fund’s status at monthly committee meetings.
“They’re not updated day to day. That’s what they pay us for,” Song said.
Unterman added, “We tell them what we’re doing. I’m committed to keep them well informed. If I’m thinking of doing something and they hate the idea, then we’re not going to do it.”
Because he will sit on the expanded Tribune board, Unterman will become a bridge for the fund to the Tribune Co. and its investment arm.
“There will be a strong relationship,” said Andy Oleszczuk, president of Tribune Ventures, a division of Tribune Co. currently invested in newspaper, television and educational ventures in Chicago, New York, San Francisco and Washington, D.C. “TMCT would certainly be a key part of how we would seek to expand our investment opportunities, particularly in the Los Angeles market.”
Seeking media attention
The two funds might share information and even jointly invest in promising companies, though principals couldn’t give details of how the working relationship will play out.
The seven Chandler family trustees are not expected to add to their investments in the TMCT fund following the Tribune-Times Mirror deal. In fact, the fund will remain as it was originally set up last year, Unterman said.
“(The fund) was very carefully structured. It’s a $550 million commitment, and we will continue to draw against that over the next year, or two or three,” he said. “The thought is, we’ll work our way through that, then see what else we want to do.”
Though the group has not sought much media attention, the partners are trying to change that.
“Maybe we’re not the best at P.R. I’d rather talk to an entrepreneur any day of the week,” Song said. “Obviously, the more press we get, it’s good not just for us. We’re trying to be more vocal and visible, and do more raising the profile of our investment companies.”
Local venture capitalists and others believe the fund will become increasingly important to the local community because of its size and the reputation of its partners.
“When you get people like that with solid names to operate in the environment, I think it is very positive in the community,” said Rock Schnabel, a partner at venture capital firm Trident Capital Inc. “We’ve run into them somewhat, but not a great deal. That has more to do with the fact that there are so many things going on right now. They have an outstanding name.”
Peanie Chen, director of business development for PeopleSupport, attributed the fund’s growing visibility to efforts from fund managers and the growing importance of L.A.’s venture capital community as a whole.
“Before it was just Idealab, but now (TMCT) is becoming one of the names people throw out there. It’s sort of a check mark, a name people think of when they think of venture capital in L.A.,” he said.
