About the Venture Capital Multiplier Fund
As announced previously by former Governor McCrory, Hatteras Venture Partners was selected by the State of North Carolina as the manager of the Venture Capital Multiplier Fund, LP (VCMF). The VCMF has $60 million in capital. A portion of the VCMF has been committed to the latest Hatteras venture capital fund, Hatteras Venture Partners V, LP (HVP V). The remainder and significant majority of VCMF capital is allocated to co-investments in North Carolina Nexus companies. For the purposes of the VCMF, NC Nexus companies are those that: a) are headquartered in NC, b) have significant operations in NC, c) are commercializing intellectual property developed in NC, or d) as a result of investment, would initiate, expand, or restructure significant operations in NC.
To assist in managing the co-investment program, Hatteras has retained Charles Merritt as a Special Advisor, member of the VCMF investment committee, and a manager of the VCMF. Merritt, who was previously the co-founder and managing director of Parish Capital Advisors, will oversee the effort to identify and develop co-investment relationships with other venture capital firms and early stage investors.
“We are pleased to expand our existing relationship with the Treasurer of the State of NC with the VCMF mandate,” said John Crumpler, General Partner. “Hatteras has a long and successful track record investing in high quality North Carolina companies like Viamet, Clinipace, G1 Therapeutics, Medfusion, NeuroTronik, GeneCentric, and Spyryx,” added Mr. Crumpler. “We are thrilled to welcome Charles Merritt to our team to help us focus on high quality early stage co-investments in North Carolina.”
The Venture Capital Multiplier Fund (“VCMF”) seeks to leverage existing early stage investment by making co-investments in North Carolina nexus companies. Target companies must have at least one of the following characteristics to meet the definition of “North Carolina nexus”:
- Headquartered in N.C.
- Businesses with a “demonstrable and significant” portion of operations in N.C.
- Businesses commercializing intellectual property developed in N.C.
- Businesses that, as a result of investment, would initiate, expand, or restructure “significant” operations in N.C.
Co-investments may take several forms within the VCMF vehicle:
- Structured co-investment relationships with existing institutional private equity managers (i.e. managers that have established funds with institutional limited partners). Managers can be based in N.C. or outside of the state so long as they have a demonstrated record of investing in N.C. nexus companies.
- Structured co-investment relationships with established angel funds and networks based in N.C. and investing in N.C. nexus companies.
- Direct co-investment in N.C. nexus companies in partnership with an experienced lead investor or deal sponsor. VCMF will not act as a deal sponsor, and any individual investment must be made in partnership with a lead investor who has significant experience and a demonstrated track record.
VCMF will not invest in:
- Sole proprietor or family owned businesses in the absence of other, non-family related outside investors.
- Individual construction or real estate development projects.
- Businesses in which there is an un-manageable conflict of interest.
Charles E. Merritt
Charles is Special Advisor to Hatteras and a manager of the Venture Capital Multiplier Fund. Charles has spent most of his professional career in private equity investing, beginning his career as an M&A analyst advising on the sale of private businesses, transitioning to direct investing in small buyouts and ultimately co-founding and selling a private equity fund of funds business. He began his career with Bowles Hollowell Conner & Co., a boutique M&A advisory firm serving the middle market. After business school, Charles served as an Associate with NationsBank Capital Investors (subsequently Bank of America Capital Investors and now spun off as Ridgemont Equity Partners), an investor in middle-market buyouts. He began his career as an alternative assets fund investor as the first Director of Private Investments at the UNC – Chapel Hill Investment Office, where he helped build the private investment portfolio. Charles then became the Director of Private Investments at The Duke Endowment (the Duke family foundation), where he managed a portfolio of over $800 million in private alternative investments. In 2003, Charles co-founded Parish Capital Advisors, a private equity fund of funds focused on small and niche private equity managers, and helped grow the business to $2.2 billion in assets under management before it was sold to the StepStone Group in 2012. Charles remains an Advisor to StepStone, and also consults private equity general and limited partners via CEM Advisors, LLC. He served as Executive Director and Professor of the Practice in the Minor in Entrepreneurship at UNC – Chapel Hill until June 2017.
Charles received a BA in Economics from UNC – Chapel Hill where he was a Morehead Scholar, graduating with Highest Honors and Distinction. Charles received his MBA from the Amos Tuck School of Business Administration at Dartmouth College.
Community and Board Engagements:
Charles is a member of the Working Group for the Minor in Entrepreneurship at UNC – Chapel Hill and serves on the Board of Advisors for the Frank Hawkins Kenan Institute of Private Enterprise. He is a Trustee and Chairman of the Board of Trinity School of Durham and Chapel Hill. Charles also serves on the Advisory Board for Habitat for Humanity of Orange County, NC.