$100 Million Equity Fund Latest Facet of Diamond State Ventures

by Arkansas Business Staff  on Monday, Feb. 10, 2014 12:00 am  

Have you heard Diamond State Ventures has a new private equity fund that will eventually total $100 million?

Diamond State Ventures III LP of Little Rock filed forms with the Securities & Exchange Commission last week that shows it raised $29.7 million of its $35 million offering.

Joe Hays, managing director and a co-founder of Diamond State Ventures, declined to name who the investors were. The SEC form lists the directors of the fund as Hays, Larry Carter of Little Rock, Centennial Bank of Conway and J. Dale Dawson of Little Rock. DSV is part of Arkansas Capital Corporation Group.

Hays said last week that it was too early to say what the money will be used for.

“We’ll have an announcement in the near future,” he said. “It’s just now off the ground.”

Just like its previous Diamond State Ventures funds, Diamond State Ventures III is a Small Business Investment Company, which is a program of the Small Business Administration.

As an SBIC, Diamond State can go to the capital markets and raise additional capital from large institutional investors around the country, Hays said.

“They don’t invest directly in our fund, but in a pool that we participate in and that’s where the other capital comes from,” he said.

So in addition to the money DSV3 raised, there’s another $60 million or more that will come from the money raised in the capital markets through the SBA’s connection, Hays said.

The company’s website touts Diamond State Ventures as a private equity and venture capital firm with $120 million under management in two funds. DSV invests in small and lower middle-market companies located in Arkansas and across the Midwest and Southeast United States.

Diamond State invests between $1 million and $6 million in “each portfolio company,” the website said. “Since the formation of our first fund in 1999, we have invested in approximately 45 companies across a broad range of industries and financing structures.”

 

 

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