Fidelity Ventures Says Goodbye, Volition Capital Says Hello

Fidelity this afternoon announced that the U.S. team of Fidelity Ventures was spinning out into an independent, Boston-based firm called Volition Capital. The new group will continue to manage 20 Fidelity Ventures portfolio companies in the U.S., and jointly manage six European portfolio companies with what is now being called Fidelity Growth Partners Europe.

Volition’s four managing partners are: Larry Cheng, Andy Flaster, Roger Hurwitz and Rob Ketterson. Other staffers include Geraldine Alias, Sean Cantwell, Don Haile, Anne Mitchell and Jill Roosevelt.

I spoke briefly with Larry Cheng, who tells me that the move was made for two reasons: (1) The Fidelity Ventures team was itching to run their own show; and (2) An independent firm would make it easier to raise third-party capital (Fidelity Ventures as solely funded by its parent).

Volition will focus on “high-growth” companies, which means between $5 million and $50 million in revenue, and between 25% and 100% in top-line growth.

Cheng says that Volition has not yet begun raising its debut fund, nor has it discussed any limited partner commitments with Fidelity. He adds that Volition can access remaining dry powder in Fidelity Ventures IV to make new investments. That fund originally closed in 2005 with $250 million, but was later expanded to $400 million.

Read today’s press release below:

Volition Capital today announced its establishment as an independent growth equity firm that principally invests in high-potential, founder-owned technology companies. The founding team of Volition Capital previously led the U.S. operations of Fidelity Ventures, a venture capital firm affiliated with Fidelity Investments.

Managing Partners in the new firm are Larry Cheng, Andy Flaster, Roger Hurwitz and Rob Ketterson. Other senior members of the founding team include Geraldine Alias, Sean Cantwell, Don Haile, Anne Mitchell and Jill Roosevelt.

Under a sub-advisory agreement, Volition Capital will continue to manage the portfolio of venture capital assets developed by the principals of Volition Capital while at Fidelity Ventures. Specifically, Volition Capital will continue to manage the existing portfolio of 20 U.S. companies and jointly manage six European portfolio companies with Fidelity Growth Partners Europe, the European venture investment arm of Fidelity International. Fidelity will not have an ownership position in Volition Capital and this spin out will not affect the venture investing of Fidelity Biosciences.

Volition Capital’s focus will be on high growth, founder-owned technology companies. These companies will generally have between $5 million and $50 million in revenue with little or no institutional investment. Volition Capital will invest in different technology sectors including Internet, software, information services and tech-enabled services.

About Volition Capital
Volition Capital is a growth equity firm established in 2010 that focuses on investing in high-growth, founder-owned technology businesses across the U.S. and Canada that generally have between $5 million and $50 million in revenue with demonstrated capital efficiency. The firm’s portfolio comprises 26 companies in the United States and Europe. Volition Capital specializes in software, Internet, information services and tech-enabled services companies that have operating discipline and aspirations for greatness. (www.volitioncapital.com)

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