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Kiddar Capital's Todd Hitt is launching a new venture fund. We have the
By: Andy Medici
Feb 3, 2017, 7:00am EST Updated Feb 3, 2017, 9:15am EST
Washington Business Journal - Kiddar Capital founder and CEO Todd Hitt wants to close more
deals, so he's launching a new venture fund to invest in real estate and construction-related
Hitt, a member of the nearly ubiquitous construction and real estate-related family, wants to raise
$25 million for his first “Built World Fund” that will target the startups working to modernize
what is still an analog construction and real estate industry.
He is putting $2.5 million of his own money into the fund, with the promise that he will get the
best deal and terms possible for investors with the lowest risk possible. Before this he has
invested in tech startups, but always with his own money.
“The Hitt way is to do your homework. We don’t dive in. We are very conservative,” he said.
“Be aggressive about grinding deals out. Focus on not risking your capital.”
Hitt founded Kiddar Capital in 2007, and the private equity company now has 12 employees and
$600 million in assets under management. Kiddar has also made investments in 11 companies
over the last year, including D.C.-based energy management software company Aquicore and
McLean-based UpsideDoor, which helps people sell homes without a real estate agent.
The company, Hitt stressed, is not related to Hitt Contracting. The two are separate entities,
although they run in the same circles (and are run by members of the Hitt family).
Hitt is confident he can get the 20 to 30 limited partners needed to launch the fund (he said there
are already eight on board) and said it will be a 10-year fund with a five-year investment cycle.
After 18 months he will evaluate how successful the fund is and start another one.
Eventually he will launch additional – and larger – funds, and the 10-year plan would be to
evenly divide his business between a series of tech funds and real estate and construction deals.
So what's the target? The construction and real estate industries that have been slow to
modernize, Hitt said. But after years of slow progress he sees the next few years bringing great
change to the industry.
"We think we are on the crest of a wave on real estate and construction tech. You can sort of see
it and feel it if you are in it," Hitt said. "It's been a slower industry to digitize."
Hitt said he will be location "agnostic" when it comes to the fund's investments, although he will
be looking at deals in the D.C. area. He will also be involved in the companies he invests in,
setting performance benchmarks for funding and making sure there is as little risk as possible.
In exchange, these startups get needed capital and access to a deep web of connections Hitt has
built across the real estate, construction and equity industries. For some startups there is value in
Hitt being able to reach out to other industry professionals for their opinion or advice, and those
are the ones in which he wants to invest.
So what kind of startups? Hitt said he will look for companies that help simplify logistics, or help
make construction management more efficient or even drone companies for their growing use in
the real estate field.
Hitt said he has spent years building his skills in this area, and the recent run of investments was
also a good way to build up his expertise before launching a fund. He is confident his ability to
make great deals and close on better terms will win the day.
"This probably doesn't make tech people very happy when I say this, but investing is investing.
And deal making is deal making," Hitt said, adding that many venture funds just write a check
and sit back. "I am not going into the tech space doing it the way everyone else is doing it."