Fidelity Ventures Team Forms Volition Capital

1/11/10Follow @wroush

There’s a new player on the venture scene in Boston. The team behind the U.S. branch of Fidelity Ventures, the venture investing wing of Fidelity Investments, has left Fidelity and relaunched itself under the name Volition Capital, according to an announcement today.

The new firm—in which Fidelity has no ownership stake—says it will invest in “high-potential, founder-owned technology companies” in the United States and Canada, and that it will shun seed-stage investments in favor of “growth equity” support for companies that already boast $5 million to $50 million in revenues and are at or near the break-even point. (“We prefer to invest in companies that don’t need external capital, but can benefit from taking it,” the company says on its new website.)

Former Fidelity partners Larry Cheng, Andy Flaster, Roger Hurwitz, and Rob Ketterson are Volition’s managing partners. Geraldine Alias and Sean Cantwell have come along as principals, and Steve Daley and Dave Gordon are associates. In its announcement, the firm also described venture partner Anne Mitchell and senior vice president of business development Jill Roosevelt as senior members of Volition’s founding team.

Volition partners were not immediately available to comment on the spin-out. The move follows Fidelity’s exit from the private equity businesses last summer, when it announced the shutdown of Fidelity Private Equity Partners. That division had $500 million under management but was reportedly unable to raise new capital amidst the financial crisis.

Volition’s team has brought most of the Fidelity Ventures portfolio with it. The firm says it has formed a “sub-advisory” agreement with Fidelity to continue to manage the 20 U.S. software, Internet, and services companies in which its principals invested at Fidelity, along with six companies from the portfolio of Fidelity Growth Partners Europe. The firm’s U.S. portfolio includes companies like open-source code database provider Black Duck, Postgres database maker, browser maker Flock, and federated identity management company Ping Identity.

Fidelity Biosciences, Fidelity’s Cambridge, MA-based life sciences investing division, isn’t part of the Volition switchover.

Wade Roush is Chief Correspondent and Editor At Large at Xconomy. You can subscribe to his Google Group or e-mail him at wroush@xconomy.com. Follow @wroush

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