DCA Capital in the News

October 15, 2004
The Sacramento Bee

A New Equity Fund is in Works:
A Roseville Trio Targets Later–stage Companies throughout Central Valley

By Clint Swett — Sacramento Bee Staff Writer

Three Roseville investment bankers, backed by a roster of local business heavyweights, are forming an equity fund with the goal of investing up to $150 million in Central Valley companies over the next four years.

Rather than targeting glamorous but risky technology startups, the principals of DCA Capital Partners say they plan to invest $8 million to $15 million in later–stage firms in sectors ranging from manufacturing to retail to health care.

Curt Rocca, one of three DCA partners, said such an approach would broaden his firm’s investment opportunities as well as spread out the risk. “We really want to deploy all our capital locally, and by casting a broad net, we will be able to do that,” he said.

Rocca is founder and chief executive officer of the Roseville investment bank DCA Partners. He formerly was CEO of publicly traded Bio–Dental Technologies Corp. His partners in DCA are Steve Mills, who was chief financial officer of AnyTime Access, an outsourcing company for loan processing, and Jeremy Wolfe, who was a principal in several large equity funds, including Goldman Sachs and ABS Capital Partners.

Rocca said DCA hopes to raise about $20 million of its own capital—including about $5 million this year. It would then partner with large equity funds to invest in regional companies. Those larger funds, he said, generally don’t have the staff to search out and evaluate investments in the region, so DCA would act as their local "eyes and ears." He said DCA will focus on companies ranging from Redding to Fresno and Santa Rosa to Reno. In a typical $10 million deal, he said, DCA would put up about $1.5 million and other investment groups the remainder.

DCA will be welcome in the Central Valley, where many companies have trouble attracting investment, said Jon Gregory, president of Chico–based Golden Capital Network. A number of investment groups in the Central Valley already focus on technology and life–science start–ups, he said, but few funded later–stage companies. “Any region needs a full spectrum of equity opportunities,” Gregory said. “This is a gap our region has had, but DCA seems to be stepping up.”

The Central Valley has typically been underserved by investors, added Carol Whiteside, former Modesto mayor and now president of the Great Valley Center, which studies the region’s economic and social issues. “There’s a tremendous amount of entrepreneurial activity in this region, but those companies need cash and investment,” she said.

Hoping to add to its clout, DCA has recruited an advisory board of 20 executives with experience in the eight business sectors in which DCA hopes to invest. Those executives will perform a variety of functions, Rocca said, from spotting investment opportunities to helping with due diligence to "mentoring" businesses in which DCA invests. He said he expects many of the advisers also to be investors in the fund.

Among those on the advisory group are former Raley’s CEO Michael Teel; retired Intel Vice President Jim Yasso; Art Savage, principal owner of the Sacramento River Cats; radio station owner Frank Washington Jr.; and real estate developer Larry Kelley.

Karole Morgan–Prager, vice president and general counsel of The McClatchy Co., which owns The Sacramento Bee, also sits on the advisory board.

Tom Weborg, a DCA adviser and a co–founder of Java City, which was acquired in 2000 by an Irish firm, said experienced advisers could help build strong relationships with investment targets. “I’d like to see what happened to me happen to other people,” he said. “I can help entrepreneurs who are not used to relinquishing control to other people to adjust to that.”

DCA’s effort displays the region’s growing business sophistication, said Roseville investment manager Joe Milam. “This validates that the Sacramento financial community is growing up and maturing,” said Milam, president of Legacy Capital Management. “We have venture capital and angel activity, and now we will have institutional–type investing.”

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

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