Mutual Capital Partners raises $16M for second venture fund

Mutual Capital Partners has raised $16 million for its second fund, which the Cleveland venture capital firm hopes to close at $25 million later this year.

Credit the fund’s co-founders Bill Trainor and Wayne Wallace for pulling in more cash than their first fund in a difficult fundraising environment. Mutual Capital Partners’ (MCP) first fund closed in 2005 at $13 million.

Medical technology companies played a big role in MCP’s first fund. Portfolio companies include Medina, Ohio-based orthopedic implants maker OrthoHelix Surgical Designs and Minnesota-based vascular-access device company Hemosphere.

The venture firm focuses its investments in Midwestern companies. MCP has yet to realize any exits from its first fund.

“MCP knows that it takes more than solid financial support to get a company off the ground — we help to make things happen,” the company said in an e-mail announcing the fundraise. “MCP believes that strong management teams win and is willing to take a long-term, traditional approach to investing.”

MCP looks to lead or co-invest in companies with revenues of more than $1 million that are seeking investments less than $10 million. Other investment criteria MCP looks for includes gross margins that exceed 50 percent and companies in industries with high barriers to entry, according to the e-mail.

One big change between the two funds is that, for the second fund, MCP sourced a much larger portion of its capital from investors outside the Midwest, Trainor said last week at a meeting of the Ohio Venture Association.

MCP has raised money from about 150 investors combined for its two funds, Trainor said.

Last year, U.S. venture firms raised $13 billion, less than half the amount of 2008, and the lowest annual total since 2003, according to the National Venture Capital Association.