Two seed-stage venture capital firms—Originate and Mid-Atlantic—have recently joined forces to create a great solution for entrepreneurs seeking local funding in northeastern Pennsylvania.

Mid-Atlantic Venture Funds and Originate Ventures have combined operations and capital, creating a spectacular solution for entrepreneurs seeking funding.

Mid-Atlantic Venture Funds and Originate have announced that the two funds will combine operations under the name Originate Ventures. Glen Bressner, of Mid-Atlantic, will join Mike Gausling and Eric Arnson as a managing partner of Originate. Fred Beste, widely considered the most experienced venture capitalist in the state, will serve as a partner emeritus, outside advisor and shareholder.

Thanks to this union, northeastern Pennsylvania now has a $50 million next-generation venture capital fund in place whose partners feature both deep venture capital and entrepreneurial expertise. "When you combine the venture capital and operational experience, we offer a terrific package for early-stage companies seeking capital," says Gausling.

Beste agrees wholeheartedly. "You can't call it anything but serendipitous," he says, "but the combination gives the area an excellent new source of equity capital for regional and local entrepreneurs."

A Legacy of Support for Innovation
The newly formed Originate Ventures will continue to build upon Mid-Atlantic's long, outstanding record of successful venture capital investment. Mid-Atlantic originally got its start with help from Ben Franklin Technology Partners (BFTP) in 1984 when three area businessmen set out to establish a locally based venture capital fund to support technology entrepreneurs. They recruited Beste, who, at the time, had 16 years’ experience in the venture capital industry, to manage the fund. Beste hired Bressner soon after as his junior partner--and 24 years later, Mid-Atlantic Venture Funds managed four venture capital partnerships with combined capital of just under $200 million.

BFTP has been a minority investor in each of Mid-Atlantic's four partnerships. In turn, Mid-Atlantic has supported BFTP's efforts to boster economic activity in northeastern Pennsylvania.

The other half of the new fund, Originate, was born last year, when Gausling contacted Arnson, a former Procter & Gamble colleague, about establishing a local venture capital fund similar to Mid-Atlantic. Together the two raised $30 million for the new investment fund, Originate Ventures, Inc.

Meanwhile, Beste and Bressner were working to put together a fifth fund. As Beste explains it, "We found ourselves with $20 to 25 million worth of commitments and Glen said, 'You know, why don't we approach Mike Gausling and ask him if he would be interested in combining capital?' It was a perfect solution."

Continuing a Great Relationship
Three of the fund's four partners originally got their starts with help from BFTP. Gausling is a co-founder of OraSure Technologies, now a 200+ employee, publicly-traded company that produces the world’s first oral-fluid HIV test. "Literally within a year of each other, we all worked at the Ben Franklin Business Incubator--Fred and Glen were there in 1986, and I was there in 1987," Gausling says. "We have made our marks over a long period of time in this community and impacted it in different ways, and this is just the next chapter of the story for all of us."

BFTP continues to be an important character in the story. "BFTP will be a substantial investor in the new fund," says Beste. "They will have $3.5 million of the $50 or so million--around six percent of the fund," he says. "But just as important, Mike, Glen and I, and BFTP have a tremendous working relationship. I personally have sat on the BFTP board for more than 20 years [Editor's note: Beste is currently chairman-elect] and they've consulted with Glen and me extensively in the work they do with entrepreneurs. The three of us go back a long way.”