On Monday, an unusual new venture capital fund announced its existence. MBM Capital, headquartered in New York, has been launched by two industry veterans, aiming to fill a void in the private capital market for control investments and operational revitalizations of venture-stage companies “orphaned” by their VC or corporate sponsors. This “special situations” investment strategy has been designed by MBM Capital to “take advantage of structural inefficiencies in the venture capital model,” and is intended to be a complement to the venture capital portion of institutional portfolios.
MBM Capital was founded by longtime VC managing partners Lauren Bonner and Arun Mittal, whose 35-year-plus combined track record of successful venture exits include sustainable real estate investment trust Power REIT, crypto derivatives platform LedgerX, Shinsei Bank, consumer price optimization platform Paribus, and Swedish fintech Klarna.
The 88 percent
“Where others look for unicorns, MBM Capital looks for thoroughbreds and workhorses,” said MBM Co-Founder and Managing Principal Lauren Bonner. “In a venture environment in which 88 percent of startups fail to reach a Series C funding round, MBM Capital is a solution for founders of revenue-generating companies whose growth trajectories or operational challenges have become barriers to competing for continued attention and capital from venture investors. We likewise are a natural option for venture and corporate sponsors under ever increasing pressure to triage their resources on their highest probability bets and seeking to prune their portfolios.”
“With the rapid evolution in recent years of the ‘unicorn or bust’ venture model, we believe the opportunity to acquire and revitalize attractive orphaned venture stage companies is both structural and durable,” said Co-Founder and Managing Principal Arun Mittal. “We know first-hand the power of combining capital, talent, operational know-how and accountability to drive sustainable growth and shareholder value. We believe MBM Capital fills an important funding gap in the venture markets and we look forward to backing amazing teams in their value creation journey.”
MBM Capital is targeting fintech, HR tech, consumer and data companies with commercial products, resilient revenues and backable teams. The fund specializes in sourcing, identifying and structuring investments, recruiting and equitizing top-tier talent, scaling, restructuring and catalyzing profitable growth, and engineering attractive exits.
Bonner previously was an operating partner at control venture capital firm 1/0 Capital, where her focus included the firm’s sponsorship of and deep engagement in companies such as Better Mortgage and Paribus, and sourcing the firm’s early investment in corporate bond trading platform TruMid; a manager at Bridgewater Associates; and an executive officer at Point72. A Harvard College graduate, she remains a partner at 1/0 Capital and an angel investor with a focus on female founders.
Mittal, an engineer by training from Stanford University and Georgia Institute of Technology, previously was CEO of the JC Flowers- and Ripplewood-backed Shinsei Bank’s US investment subsidiary; a member of the founding team and EVP of NYSE-traded Power REIT; CEO of 1/0 Capital-backed consumer finance big data companies PhoenixABS and TheNumber.com; President of StoneCastle Asset Management; and, most recently, senior advisor to Klarna and LedgerX.
