I started FTII in mid 2005 with Rick Peterson. Rick is a financial industry professional with extensive contacts in North America and Europe. Our goal was to start an early-stage tech fund with an optimum structure and extremely low expenses.
We also agreed to grow the fund only as quickly as I could find exceptional investment opportunities. This would maximize the returns to our investors because we would maintain large cash balances.
The fund performed well, but an early exit generated an excess of cash, and we had to close FTII to new investors shortly after launch.
After six years of running the Fundamental Technologies II fund (FTII), I decided to retire from the fund management business.
It was increasingly challenging to invest all of the cash in FTII. High cash levels suppressed returns, but also reduced volatility, over the later years.
One of the reasons early stage investment has become more challenging is that today's most exciting companies are incredibly capital efficient. The majority are bootstrapped, or financed entirely by friends and family. Quite simply, only a very few of today's best companies require equity capital.
I continue to manage FTII, and to make angel investments, but the only money in the fund now is my family's.
Everyone that invested in FTII ended up making money - even through the very difficult period of 2008 - 2010.