REDGATE COMMUNICATIONS, INC. (AOL)
INDUSTRY: Software Publishing
INVESTMENT THESIS: Growth
ROLE: Sole Venture Capital Investor
In 1982 Mr. Pica brought Redgate Communications, Inc. as an investment opportunity to Hutton Venture Investment Partners, Inc. ('HVIP'), which was managed by Mr. McGrath. Following the investment, Mr. Pica represented HVIP's interests on Redgate's Board of Directors, while EF Hutton & Company also provided operational space and publishing services. Upon Redgate’s sale to International Thompson, Inc. approximately one later, HVIP realized a financial return of 300% on its one-third ownership of Redgate.
After the sale, Mr. Pica remained involved with Redgate as an advisor to Ted Leonsis, the company's founder, as Mr. Leonsis repurchased the company for the value of its liabilities. He also advised Mr. Leonsis in merging Redgate into America On Line ("AOL") as AOL's key cornerstone to its later success. Mr. Leonsis went on to become Vice Chairman of AOL/Time Warner and one of its larger shareholders, while Mr. Pica continues to provide advisory services to him.
FINANCIAL PERFORMANCE: 3X return to HVIP in eleven months; personal return to Mr. Pica’s client post-transaction: over a billion dollars
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