February 17, 2006
By Jim Stafford, The Oklahoman

Young investment bankers find city responsive

When Richard Wilkes was introduced to a pair of young former Goldman Sachs investment bankers last year, he was impressed by their audacious goal to build a $75 million private capital investment fund in Oklahoma City.

“The venture capital business is dominated by youthful people,” said Wilkes, a Houston-based financial consultant and former president of the Texas Mortgage Bankers Association. “These are exceptionally bright guys.”

So when Virgo Capital co-founders Hemanth Parasuram, 28, and Guhan Swaminathan, 31, asked Wilkes to serve as the chairman of their advisory board, he didn’t hesitate to sign on.

“I really like their approach; it’s highly analytical,” Wilkes said Thursday evening at a “launch” event at Cafe Nova for their Virgo Capital Fund I LP. The pair recently closed on almost $20 million in capital investment in the fund.

The company’s Web site at http://www.virgocapital.com lists Records Private Equity, an affiliate of MidFirst Bank, as the “cornerstone investor” in Virgo Capital Fund I.

The Virgo Capital founders chose Oklahoma City as a home for the fund because of Parasuram’s life-long ties to the city.

A 1995 graduate of the Oklahoma School of Science and Mathematics, Parasuram earned a degree in electrical engineering at Stanford University in three years. He worked at Goldman Sachs and then as director of corporate development for publicly traded TIBCO Software.

“I always had an interest in coming back home and always wanted to launch a business and thought it was a good way to do both,” he said. “We saw an interesting opportunity in Oklahoma, as far as a dearth of private capital, so that was part of the motivation.”

The pair met while each was working at the Goldman Sachs investment bank. Swaminathan was raised in Pittsburgh and graduated from the Wharton School at the University of Pennsylvania.

The Virgo co-founders share a common ethnic bond, one that Parasuram said was no obstacle in building their fund.

“Both of our families are from India,” he said. “Ethnicity becomes less of an issue when you are sort of speaking the same language and your story makes sense. I would say it was no hindrance in any way.”

Virgo Capital is targeting only “mature” small- to medium-size businesses in the southern United States that need additional investment for growth, Parasuram said. They created the business in early 2005, began fund raising efforts in late summer and closed on the initial investment in January.

“We were just overwhelmed by the level of support we got here in Oklahoma City,” Parasuram said. “Obviously, they like the fact that I’m a native Oklahoman coming back to Oklahoma. But everyone we met was interested in seeing that we succeeded.”

Mike Moradi, a principal in Norman-based Venture Development Associates LLC and an informal adviser to the Virgo Capital co-founders, said the fund’s investment strategy will be a boon to businesses in Oklahoma and elsewhere.

“Virgo Capital will address the financing needs of companies that are too large for traditional VC, but not quite ready to go public,” Moradi said. “More importantly, this is smart money — Virgo will help companies meet the challenges they will face as they grow, and help turn those $25 million companies into $100 million companies.”

Wilkes said the $75 million milestone looms in the not-too-distant horizon.

“In my estimation, it’s very achievable this year,” he said. “They just raised some more capital today, in fact.”