The next phase of Mark Kvamme’s career officially starts this week.
The ex-Sequoia venture capital veteran, who announced near the end of last year that he would step back from the venture capital fund Drive Capital that he co-founded a decade ago, is planning to debut a new $500 million investment fund at an invite-only event in Cleveland tomorrow evening, according to two people familiar with the matter and an invitation for the event seen by Fortune.
Kvamme is launching an impact fund, called the OHIO Fund, with Ray Leach, the CEO of Ohio-focused venture development organization JumpStart Ventures, according to an investment deck seen by Fortune (the deck was first reported by Business Insider). The OHIO Fund is modeled after Temasek, Singapore’s growth-focused sovereign wealth fund, and will invest in Ohio-based companies, investment funds, real estate, and infrastructure projects that will accelerate economic growth in the state, according to the documents. The fund will have offices in Cincinnati, Cleveland, and Columbus, and “regional affiliates,” according to the pitch deck, and Kvamme and Leach are aiming to raise $250 million for the first close. The first close could happen as early as the second quarter, says a person familiar with the matter.
There have been murmurs for months over what Kvamme would do next. Kvamme, who is also a race car driver, had moved to Ohio more than a decade ago to launch the “JobsOhio” program as a favor to his friend, the then-Ohio Gov. John Kasich, before launching Drive Capital with fellow ex-Sequoia investor Chris Olsen. Drive, which is based in Columbus, had just recently closed a $1 billion fund when Kvamme announced he was stepping back, leaving the midwestern fund without one of its key cofounders.
Kvamme has acknowledged he’s considered running for public office. Late last year, TechCrunch published a letter Drive Capital sent to LPs after a local publication revealed Kvamme was thinking about raising a new fund. Drive’s letter to its limited partners said that “all of us at Drive were surprised by this news, as we are sure you were too,” and stated that “we have a formal separation agreement with Mark that prevents him from starting a competitive firm or fund to Drive.” (A Drive spokesperson declined to comment on Kvamme’s new fund.)
Fundraising materials for the OHIO Fund say that Kvamme and Leach’s new fund will “rarely compete” with other investors in the region, and the pitch deck says that the fund will “only price rounds when existing investors are unable to do so.” Investors at the OHIO Fund won’t plan to take board seats, according to one of the people. Kvamme didn’t respond to multiple requests for comment prior to publication.
While the OHIO Fund has not yet been formally launched, Kvamme and Leach are in discussions with a few anchor limited partners, according to one of the people.
Kvamme and Leach are fundraising two separate funds, according to the fundraising materials. The Ohio High Growth Investment Opportunities Fund will be a fund with a $375 million target that, similar to Sequoia’s updated fund structure, will be evergreen with no termination date. The second fund, the Ohio Bank Impact Fund, has a $125 million fund target and will be structured more like a traditional closed-end investment vehicle.
Should Kvamme and Leach raise the intended capital, Kvamme will serve as president and chief investment officer for the OHIO Fund, and Leach will manage the fund’s operations after the first close. Fundraising materials laid out Kvamme and Leach's respective track records: Prior to his current fundraising efforts, Kvamme had invested $296 million in capital and returned $1.92 billion to investors, with unrealized returns of $819 million. Leach has invested $86 million in Ohio startups, returning $84 million to date with $220 million in unrealized returns.
Kvamme is expected to announce the new venture Thursday evening at a JumpStart Ventures limited partner meeting at a venue near Cleveland’s West Side Market.
See you tomorrow,
Jessica Mathews
Twitter: @jessicakmathews
Email: jessica.mathews@fortune.com
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