Startup Spotlight: Oval Park Capital emerges from stealth, plans $25M fund

Editor’s note: Every week as part of our Startup Monday package we include a special feature focusing on an emerging company or funding resources. Today Allan Maurer profiles Oval Park Capital.

RALEIGH – Good news for startups: Oval Park Capital (OPC) has emerged from “under the radar” after banking the first $4.5 million of its investment fund targeted at $25 million, in July.

“We’ve been under the radar the last few years,” said Justin Wright-Eakes, founder and sole partner of the firm.

OPC participated in the $8 million Series A round for Raleigh-based AppliedLifesciences and Systems, (ALSS) prior to establishing its new fund. ALSS an automated and individualized poultry vaccination system.

Wright-Eakes said OPC has wo investments in its portfolio so far, Medicom Technologies (Raleigh) and Grubbly Farms (Atlanta).

It will close on its third investment this month. Two or three more pending in due diligence, and 10 to 15 are being screened earlier in the process. Two-thirds are in North Carolina, the rest scattered throughout the Southeast. It expects to make one or two more investments before the end of the year.

Wright-Eakes began his career in investment banking in New York City after graduating from the University of North Carolina at Chapel Hill business school. He moved on to working with Citigroup and others on distressed credit accounts, which was “highly antagonistic,” he said.

He wanted instead to work with founders entrepreneurs and founders to build companies and gradually became particularly interested in early-stage firms.

Initially, he made one-off investments and advised informally. Then he launched Oval Park Capital, his first committed fund. “We’re making progress, especially considering the difficult Covid pandemic. OPC expects to record a second investment in its fund in early November.

Wright-Eakes said the fund has “noble goals.” It prefers to invest in companies that do some social good, help the environment, and invest in women and minority founders.

Doing social good

Wright-Easkes noted OPC does not invest in anything with an FDA risk, no therapeutics or medical devices. It is interested in areas that solve problems in industry and offer good returns but also do social good. They include technologies that help provide clean water, removes antibiotics, or reduce waste in areas such as healthcare.

While Oval Park is generally industry-agnostic, the majority of its portfolio companies operate in large, inefficient, global industries where scientific and engineering breakthroughs can rapidly generate large efficiencies and cost savings.

“Some of these industries,” according to the firm, “include agricultural, food, animal health, clean energy, financial, cybersecurity, real estate, and industrial technologies. Oval Park does not invest in human therapeutics, human medical devices, or any social or other media companies. We employ a rigorous screening process that results in investments in only 1 in every ~100 companies we evaluate.”

Wright-Eakes adds, “Our sweet spot is being the first institutional money invested, with typical checks from $250,000 to $500,000. Some earlier startups may get smaller checks. Our average check size is probably $500k to $1 million, but we’ll occasionally go as low as $250k for earlier stage investments or as high as $1.5mm for Series A and beyond.”

OPC wants to do more than write a check for early stage firms, acting as a co-founder and helping them develop a go-to-market strategy, prepare to raise more money and move to the next level, said Wright-Eakes.

Its one-page criteria sheet outlines its interests:

Fund overview

Oval Park said it will consider investments in early-stage ventures across a wide range of technologies, geographies, verticals, and industries. Its criteria include:

• Exceptional founders and supporting cast with experience and expertise across all critical functions.

•Novel technological solution to large costly problem,ideally with strong intellectual property protection.

• Compelling and obvious customer value proposition that generates a strong willingness to pay.

• Proof of product-market fit, whether it’s a positive pilot, customer feedback or strong revenue traction

• Strong unit economics throughout entire sales cycle and customer lifecycle.

• Scalable business model and infrastructure with no major human or technical barriers to rapid growth.

• Large addressable market size with potential for rapid customer adoption.

• Clearly defined and achievable go-to-market strategy.

• Favorable competitive landscape ripe for disruption.

• Near-term growth and/or value creation catalysts.

• Synergies with existing portfolio companies.

• Robust financial forecast underpinned by thoughtful and defensible granular revenue and expense assumptions.