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Wednesday, July 13, 2011

Banker Vague, travel mogul Tarte form venture firm

Scott Tarte was a partner in TravelOne, the Philadelphia-based travel agency, who got rich when he sold sold out to American Express. Richard Vague made a fortune as president of First USA Bank, the Wilmington company that's now the core of JPMorgan Chase & Co.'s credit card arm. 

What to do next? Tarte and his TravelOne partner, Jeff Harrow, invested in Sparks, an event marketing agency,w hci counts Google among its cleints. Vague went on to run Barclaycard USA, and is now chairman of Energy Plus, the University City-based power retailer. Restless, they took advice from longtime Philadelphia venture lawyer Steve Goodman of Morgan Lewis & Bockius: "He gave us the idea to start a fund," said Vague."He's done more evangelism in the early-stage investment space than anyone. He suggested to us there were more quality ideas out there than there was money to pursue them. To us, that sounded like opportunity."

The result is Gabriel Investments, their $3.5 million fund. Backers include Vague and Tarte contacts such as Ajay Agarwal, the Blackstone Group investment banker who sold TravelOne (and rival Rosenbluth Travel) to American Express. Rick Horwitz of RAF Industries (Robert Fox's venerable investment company) is a backer. So is Tony Ibarguen, ex of Safeguard Scientifics, and John Brossington, of LiquidSpoke, and lawyer Henry Nassau.

"We'd both done some early-stage investing on our own. The idea of putting a process to it was attractive to us," Tarte told me on a visit to Vague's airy office at the University City Science Center overlooking both Penn and Drexel. "Since we started the fund we've had 100 deals come by our desk. We've met with at least 40 companies. And we've met some of the venture players in our area, who are extremely receptive to having another participant."

Their target investment is $250,000 to $500,000. They've backed:

- Chris Stanczak's digital ticketseller TicketLeap, which is migrating from a Web-based to a social-media-based and Facebook-friendly platform, for events ranging from high school football games to nerdfests like Comicon and Wizardcom.  

- Careerminds, ceo Raymond Lee's Web-based outplacement service - a business for these times, says Vague.

The group avoids pharma and biotech and "deep tech", "anything we have no way to evaluate, and anything that requires more than $10 million," Vague told me. "There's a lot of really talented people here in Philadelphia, who have just graduated, who are now willing to participate in a start-up company, because the alternatives these days are few."
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About Joseph N. DiStefano
Joseph N. DiStefano writes this blog to feed his PhillyDeals column in the Philadelphia Inquirer. Joe has been a member of Bloomberg LP’s New York Finance Team, wrote the book “Comcasted,” taught writing at St. Joseph’s University, and studied economics and history at Penn. Reach Joe at 215-854-5194 and JoeD@phillynews.com
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