DCA Capital in the News

January 13, 2005
The Sacramento Bee

Funding Source Grows:
A Private Equity Fund Aimed at Low–tech Firms Quickly Raised $millions from Local Investors

By Clint Swett — Sacramento Bee Staff Writer

DCA Capital Partners, a private equity fund formed late last year, quickly raised $millions from area investors to finance primarily non–technology companies in the Sacramento area and Central Valley.

The lion’s share of the investments came from 18 of the 20 executives who sit on DCA’s advisory board, said Curt Rocca, a founder and partner in the Roseville–based fund.

Board member Ray Pingle, a former chief information officer at Sutter Health and now an independent consultant, said he invested because the region is underserved by the big equity funds from the Bay Area. “There may be good investments here not seen by other funders,” he said.

This funding will fill a gap since local private equity and venture capital firms have largely focused on technology startups rather than companies in mature industries, said Jim McCarthy, a partner in Legacy Capital Management, a Roseville money management firm. He predicted the fund will bolster the local business scene: “When there’s more capital here, more entrepreneurs and businesses will come.”

Rocca said the money will be combined with more than $70 million from large institutional partners to target companies in such industries as health care, manufacturing and retail.

Rocca said DCA expects to fund three firms this year at between $8 million and $15 million per company. Typically, he added, DCA will invest in companies that have established revenue but require additional funding to expand into new markets, launch a new product or perhaps buy out early investors.

Besides providing funding, the advisory board will watch for investment opportunities, help evaluate the businesses seeking funding and offer expertise and oversight to firms in which investments are made.

“DCA has built a world–class set of advisers,” said Jon Gregory, president of Chico–based Golden Capital Network, which brings together venture capitalists and entrepreneurs. “It’s not unusual to have that kind of expertise in established capital markets, but it’s new for the Sacramento Valley.”

Other board members include Karole Morgan–Prager, vice president and general counsel of The McClatchy Co., which owns The Sacramento Bee; and Dan Brunner, a retired managed care executive. Brunner said board members can use their backgrounds to help guide the firms through growing pains. “The investment risk is minimized by the collective expertise of the people on the board,” he said.

Rocca said DCA has looked at about four companies as potential investment targets, but conversations are preliminary, and no funding is expected before the second quarter.

About The Writer: The Sac Bee’s Clint Swett can be reached at (916) 321–1976 or cswett@sacbee.com.

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