Imagine being able to extract the solar energy trapped in the world’s tropical oceans and use it as a renewable power source.
Although that might sound like science fiction, a company in Hawaii called Ocees International Inc. is pursuing the technology — and it’s turned to a new Lancaster-based venture capital fund for help.
JPF Venture Fund 1 is the brainchild of Lancaster County resident Jeremy P. Feakins and his administrative team, which includes midstate businessmen Jim Greenberg and Ed Baer.
According to his Web site, Feakins founded and took public Medical Technology & Innovations Inc. and has managed reverse mergers for several companies, including Caspian International Oil Corp., Care Recruitment Solutions International Inc. and IP VoiceCommunications Inc.
A reverse merger is when a private company buys a public company then combines the two.
JPF’s goal is to practice sustainable investing, which involves products or services that improve social conditions, Feakins said.
“We liked the whole area of renewable energy and clean technology companies,” said Baer, the fund’s chief administrative officer and co-founder of The Marston Group Inc., a midstate boutique investment banking and consulting firm. “We also liked the idea of not only providing the capital and experience to help these companies grow … (and) that everything we look at has a humanitarian aspect to it.”
Of course, the principals of JPF also believe the companies the fund invests in will prove profitable.
“We’re certainly not a charity,” Feakins said. “For us to get involved, the company has to have a product. We’re not interested in things on the drawing board. We’re looking at companies that have proven technology and customers in the pipeline.”
Ocees last fall became JPF’s first client, and several companies are in varying stages of the due diligence process, Feakins said.
He said one company has invented a process to make bricks primarily using whatever soil is available, making housing more affordable to construct. Another company has developed a 15-pound, renewable-energy power pack that could be used by military forces overseas, Feakins said.
What the firms have in common is that they need a monetary boost to get off the ground.
“We’re looking at companies that generally have really good technologies and do good for people but haven’t been able to commercialize those (ideas),” said Greenberg, a partner at York-based law firm Katherman Briggs & Greenberg and chief investment officer for JPF.
JPF will require all of its companies to locate as much of their operations as possible at the fund’s 30,000-square-foot warehouse on South Queen Street in downtown Lancaster. For example, the accounting department of Ocees will move to Lancaster, but its power plant will not.
The space could house three or four companies and mean 100 to 150 jobs for the Red Rose city, Feakins said.
But before that happens, JPF must raise more funds, Feakins said. The goal is $5 million, and so far the total has reached “in the seven figures,” he said. About 20 investors have signed on, Baer said.
What sets JPF apart, aside from its focus on sustainable investing, is its insistence on management and financial oversight for the companies in its portfolio, the principals sad.
“Too often with these early-stage companies, an investment will be made in the company and they veer from their plan,” Baer said. “We want to make sure that doesn’t happen, as protection for investors.”
JPF’s requirement also is intended to help the company succeed, Feakins said.
“We find a lot of companies are headed by engineers and scientists trying to be CEOs,” he said. “Our view is not that we want to supplant existing management, but we want to be able to help and support management.”
There’s a set time limit on JPF’s involvement.
“I don’t know of any (funds) like we are,” Baer said. “We are in effect a short-term investor. We invest in these companies just prior to taking them public, and we insist that they agree to allow us to take them public.”
Baer said the fund hopes to take Ocees public on the London Stock Exchange next fall. Europe offers better opportunities than the United States to take renewable energy companies public, he said.
Companies also must agree to undertake a 12-month campaign to raise more money once they go public. Overall, JPF’s goal is to begin divesting itself of a company after 12 to18 months, Baer said.
Firms would no longer be required to stay in Lancaster once JPF divested itself, but the fund would allow them to keep renting space at the JPF facility, Baer said.
Article appearing courtesy of Central Penn Business Journal
photo: Photos8.com
