Gator Mezzanine Fund of Winter Park closes on first deal

Two years after a Winter Park-based fund made up of Florida investors who target Florida companies got its start, the fund closed on its first deal: a $1 million investment in a financial management company for condos and homeowner associations.

While Gator Mezzanine Fund isn't a high-risk venture capital fund — it makes investments through a combination of five-year loans and warrants and targets already-profitable companies — it's a welcome bit of activity in a beaten-down investment climate.

Gator Mezz, as it's called by founders entrepreneur Seth Ellis and PCE Investment Bankers principal Michael Poole, closed on a $1 million deal with Association Financial Services earlier this month.

The injection of dollars will help the nearly 3-year-old Miami company continue to grow in a tough environment, said chief executive Ken Arnold.

"Certainly since about November of last year, it has been more difficult," he said of the credit freeze.

While Poole and Ellis are graduates of the University of Florida, hence the name of the fund, they say it's not limited to alumni. (It's a coincidence that Arnold happens to be a Gator, too.)

Gator Mezz started in 2007 and has about 50 investors, including attorney John Morgan and attorney and UF trustee Daniel Ponce, pooling about $27 million, Ellis said.

"We had a total of $3 million drop out when the economy tanked, that was it," he said.

The fund is noteworthy in that it appears to be the only mezzanine fund based in Florida that specifically caters to Florida companies. Its investments range from $500,000 to $3 million.

Venture capital is at a 12-year low nationwide and the void is especially prevalent in Central Florida, which didn't receive a dime in the first quarter of this year. On top of that, a group of local "angel" investors in Winter Park abandoned their efforts earlier this year.

It took Gator Mezz two years to make a deal, but Poole, who's PCE Investment Bankers has a significant stake in the fund, said things are looking up.

Traditional banks have continued to tighten their lending standards even for good companies.

"So good companies that are looking to grow are looking for alternative sources of capital," he said.

Small biz stimulus hits another snagThere has been yet another delay in the rollout of Gov. Charlie Crist's so-called stimulus plan for small businesses.

The plan for the state to invest $10 million in low-interest loans and technical assistance to already-established small businesses has already spent nearly seven months mired in red tape.

Now the state has chosen Florida First Capital Finance Corp. and Orlando-based Black Business Investment Fund as administrators of the $8.5 million loan program.

But an investigation into a separate group has needlessly put the start of the loan program on hold.

Dale Brill, director of the governor's Office of Tourism, Trade and Economic Development, notified the Black Business Investment Fund in a letter last week that the funds would not be distributed because of a pending Inspector General investigation into the Tallahassee-based Florida Black Business Investment Board.

The two groups are unrelated, though they have similar names and both have missions to help minority business owners grow their companies.

Brill said the delay is needed to perform extra due diligence.

"We'll take a couple of days to ask the questions and move on," he said.

Inez Long, president of the Black Business Investment Fund, said her group is not connected to the Florida Black Business Investment Board and looks forward to beginning the loan program.

Beth Kassab can be reached at bkassab@ or 407-420-5448. Read her blog at

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