IVCA Profile: 2013 Fellows Award Recipient Jim Dugan, CEO and Co-Founder of OCA Ventures

IVCA Profile: 2013 Fellows Award Recipient Jim Dugan, CEO and Co-Founder of OCA Ventures

November 6, 2013 - In the weeks leading up to the 2013 IVCA Annual Awards Dinner, there will be profiles of all the persons who will be honored at the event. This week, the IVCA talks to Jim Dugan – CEO and Co-Founder of OCA Ventures – who is the recipient of The Fellows Medal. Mr. Dugan is a founding member of the IVCA, and exemplifies the philosophy of the The Fellows Medal, which “recognizes individuals for their outstanding contributions to the private equity profession and to the Illinois Venture Capital Association.” 

Jim Dugan is the Chief Executive Officer, Co-Founder and Managing Partner of OCA Ventures. Jason Heltzer, a Partner at OCA Ventures, said this in his nomination of Mr. Dugan for The Fellows Medal...”Jim is extremely passionate – he out-works and out-hustles most people. He is generous with his time mentoring many people in many industries, and that includes non-profit organizations – including the IVCA – with no expectations of what he gets out of it. Certainly as his partner, I can attest to Jim’s ethical compass...which points to true north.”

Mr. Dugan has over 17 years of corporate finance, capital markets, and venture capital investment experience. Prior to forming OCA Ventures, Jim traded derivatives at the Chicago Board of Trade and worked in corporate finance with Continental Bank. While at Continental Bank, Jim participated in the structured financing of companies ranging in capital size from $10 million to several billion dollars and in the formation of a $150 million subsidiary to fund mezzanine debt and equity financings.

Mr. Dugan is a founding member of the Illinois Venture Capital Association, where he formerly served five years as Treasurer, Director and member of the Executive Committee. Prior to serving as Treasurer, Jim was the Chairman of the Legislative Committee for the IVCA, which in that capacity, he helped establish HB 3212 as Illinois law.

Mr. Dugan received a BA in Economics from the University of Rochester and earned his MBA from the Kellogg Graduate School of Management at Northwestern University. He is a frequent guest lecturer and panelist at the Kellogg School and the Chicago University Booth Graduate School of Business. Jim is also a board member of the Chicagoland Entrepreneurial Center (CEC), NU Wave, AVAC Fund, and a charter member of Tie Network Chicago. He is also the Co-Founder and Treasurer of www.SmartBet.org.

The IVCA spoke with Jim Dugan regarding the honor of The Fellows Medal, his distinguished career and his viewpoint on the current Venture Capital and Private Equity industry. 

IVCA: You've had a long history and connection to the Illinois Venture Capital Association. What does receiving the Fellows Medal mean to you in context with that association?

Jim Dugan:  When Maura called to inform me of the Fellows Medal, I thought she had misdialed, as receiving the Fellows Medal is quite an honor that I hold in the highest regard, and to be recognized by my peers in this way is very humbling. However, The Fellows Medal is really an award bestowed to all of OCA Ventures, as our entire investment and support teams are devoted to contributing to Illinois’ venture capital and entrepreneurial ecosystem. My partners have been very supportive of my work with IVCA, which given our involvement since inception, there have been plenty of times whereby my OCA colleagues have covered for me at work to accommodate various IVCA activities, so I really want to thank and applaud the great team at OCA for the Fellows Medal.  

The IVCA has achieved spectacular growth since the early days when pretty much all of the activity was run out of Carl Thoma’s office.  Our membership now comprises 128 members, of which more than 50% are investment firms, and I am so encouraged for the future of Venture Capital in Illinois.   Given the recent rhetoric of the ‘Rise of the Rest’ in technology entrepreneurs beyond Silicon Valley, I think it is essential to have strong trade organizations throughout the United States to help propagate the mission of Venture Capital partnering with visionary entrepreneurs to create world class companies. The future of America’s economic prosperity and global competition depends significantly upon innovation and resourceful entrepreneurs to commercialize technological advancements, and the IVCA serves as a beacon – and a home base – for aspiring venture capitalists and entrepreneurs to interact and to commerce.  

IVCA: How do you compare the Venture Capital and Private Equity industries before the IVCA and afterward?

Dugan: When I started in this roller coaster business in the late 1990s, there was no IVCA, and it was a challenge for me to meet many of the leading VC and PE professionals. Also, the Venture and Private Equity communities didn’t have the IVCA, and networking with other firms wasn’t as easy. The hallmarks and charter of the IVCA – networking within the community, curriculum development and lobbying efforts to propagate the message of Venture Capital and Private Equity – I think all of those have been significantly achieved.

IVCA: Have you been inspired by persons in the business that you’ve met along the way, and their work with the IVCA?

Dugan: Absolutely. Industry leaders like John Canning, Carl Thoma, Bruce Rauner, Bon French, Steven Beitler, Bruce Rauner, Keith Crandell, Ellen Carnahan, Bret Maxwell, J.B. Pritzker and Sam Guren to name a few, many of whom are IVCA Award recipients, and all are valued trailblazers whose work is admired by OCA Ventures. Chicago is such a productive and energized city, and often these leaders and others will take a moment to offer constructive feedback or a simple word of encouragement. I truly believe that the IVCA has become one of the strongest regional VC and PE trade organizations as a result of the selfless giving of so many of our industries leaders. Again, to receive the Fellows Award is an honor for me, and OCA Ventures.

IVCA: In your advocacy and association with the IVCA, what has been the greatest accomplishment of that organization in your point-of-view, regarding the promotion of the Venture Capital and Private Equity industries in the State of Illinois?

Dugan: It’s hard to narrow it down to one accomplishment, but I do believe the effort of the IVCA in lobbying for the passage of the House Bill 3212 – that became a law in Illinois. This law served as the foundation for a program from the State of Illinois to invest one percent of its investment portfolio into Venture Capital and Private Equity, with the intent to invest in Illinois companies. This is manifested by the Illinois Technology Development Account [TDA]. Tracking HB 3212 from inception to law is a significant accomplishment, and I’m proud to have been a small part of that process.

Also, many funds in Illinois have benefited from that law – OCA Ventures, MK Capital, Prairie Capital, Apex – which resulted in significant job creation and taxable revenue for Illinois. It’s been a tremendous double bottom line effort, and I think the IVCA deserves real accolades for that lobbying effort.

IVCA: Your career has been deep and accomplished. What is the origin of your interest in the financial world?

Dugan: I started going to work at age 16 during the summers with my father at the Chicago Board of Options Exchange and the Chicago Board of Trade. I was interested in the trading business, and I enjoyed both the analytical math side and the competitiveness of options trading.  As that business developed and the markets matured, the advent of technology became a competitive differentiation, which  kindled an interest in software and financial markets for me at a young age – that was the beginning.

In a broad sense, when I began working on those exchanges, starting as a runner and ultimately becoming an options trader, I learned that your word is your only real currency. When I was trading every day, I was building a reputation, and ultimately that accountability carried over to my work in Venture Capital and Private Equity. I learned to be a reliable partner, to follow through, and to show up every day with a good attitude. These character traits and the learning lessons from my options trading days are directly applicable, and I would like to think valued in the Venture Capital arena. 

IVCA: How did that experience spur the development of OCA Ventures?

Dugan: It was observing early on the significant impact of technology on the trading business, direct market access and more. From there I followed a path to early stage company development. I love working with people, and I like when the analytical and creative processes coincide.

IVCA: There has been a lot of change and focus on how the financial industries have conducted their business in the last six years. In your opinion, how can the integrity of the those overall businesses continue to grow, post the 2007-2008 period of bailouts, backlash and regulatory adjustments?

Dugan: It’s a big topic, but it comes down to transparency and accountability. Dodd-Frank and related legislation is mainly about transparency for the investors. ‘Main Street’ is tired of Wall Street entitlement, and fundamentally in this post-recession climate fund managers and custodians of other people’s capital are responsible for transparency and integrity in their dealings, thus the higher expectations and fiduciary duties when managing assets

It’s a continuation of smart policy, but at the same time we have to be sensitive to not overly burden with legislation. A few bad apples have spoiled the bunch – so much so that the regulatory and compliance costs are significant. While checks and balances are critical, the reality is that small fund managers are struggling, which has created another barrier to entry for aspiring venture capitalists.     The combination of self-regulation and formal oversight is optimal.

IVCA: How does Venture Capital and Private Equity keep prospering in the atmosphere of this current climate, post the Great Recession?

Dugan: The economic engine of America is entrepreneurship. Venture and Private Equity fuel that development. Our job is to create new companies, which in turn provides high-paying jobs in the technology sector. There will always be a role for this union of inventors and capital, regardless of economic cycles, and our industry will continue to prosper as a vital component of U.S. economic growth because there will always be start-ups. Our job is to help those start-ups develop more quickly and more effectively, period. 

IVCA: You give many lectures to graduate students at Northwestern University, and you also are an advocate of local entrepreneurship. What piece of simple or common advice do you offer newcomers and graduates to the world of Venture Capital, Private Equity and financial businesses, that you believe can allow them to negotiate in those worlds?

Dugan: I look back on my many mentors with real gratitude for sage advice during my formative years. Now, when asked for advice, I offer that younger people remember a few key tenants. The first is that your word is your currency, you must follow through and you must maintain your professionalism even under fire. You’ve got to understand that this is a long term business with many cycles, there will be times of uncertainty and abyss. It’s in those darker times that you have to be resilient, enthusiastic and accountable.

The second piece of advice is that it’s harder to learn if you’re always speaking, so learn to listen well. This is an apprenticeship business.  Early on, you want to bring much enthusiasm and work ethic, because the entrepreneurs are putting everything on the line to build their business. Leverage your core competency on behalf of your firm and portfolio companies to develop your toolkit. In order to do so, you must seek great mentors, to learn from others and your own mistakes, and to not dwell on missteps – learn and move on. Sure as the sun rises, the markets will open for a new day of opportunity.  

IVCA: And what is the final piece of advice?

Dugan: Remember that fortune favors the bold. Particularly in Venture Capital. Conventional thinking can lead to mediocrity, and greatness is sometimes a lonelier task. Working hard and having a tenacious constitution is critical in our industry. Demand more of yourself, entrepreneurs will expect your best everyday, and you cannot afford to nap in this business. 

IVCA: What personal interest, besides your work and family, do you have beyond the world of Venture, Private Equity and the financial business, that people would be surprised to hear?

Dugan: I have four beautiful children, ages 9-13.  Their interests in student athletics have led me to coach an advanced travel girl’s lacrosse team in Hinsdale. I enjoy coaching quite a bit, which is very similar to Venture Capital in some ways, so I think I am pretty lucky to fulfill my passions at work and at home. And I picked up a new sport at age 41. Having previously never owned ice skates before, I’m now a goalie in a men’s ice hockey league. While maybe a surprise to those beyond OCA, my partners are both impressed and disturbed, especially the position choice of goalie, but I just thought that looked like a great way to spend a Sunday morning. Although that puck is solid rubber – ouch –  it is really fun and an awesome sport, and there are no titles in the locker room.   .

My family’s history in the US Armed services has inspired my interest in military history ever since I was a boy, which has led to OCA’s involvement with the Wounded Warriors Foundation. I recently went on a trip with Senator Tammy Duckworth, and a group of entrepreneurs – Scott Kluth, Chuck Templeton and Brad Woloson – to Walter Reed National Military Center, which impacted me beyond measure. 

IVCA: What do you enjoy doing when you’re at home? 

Dugan: I am an avid amateur poker player, and proud to be a co-founder of SmartBet charities. My weekends are all about family, and I am an amateur chef – mostly Italian and French cuisine. It’s all about the mother sauces, which are not easy to master, at least for me. In general, I am a passionate people person, I love a good conversation and to hear one’s story and outlook, I guess I am a typical Irishman that way. 

Above all, I am an optimist and a bit of a dreamer, frankly. My outlook is reinforced through being married to my adoring wife Nancy – whom I met in college literally on the sidelines.  She was the smart cheerleader and optical engineer who rejected my courtship for two years, but persistence paid off, it’s all about long term goals and fortitude!  

IVCA: Is there anything else you’d like to express to the IVCA regarding the Fellows Award?

Dugan: The IVCA is a powerful trade organization now, and it has been an honor for me to be involved. I am very proud of varied and multiple accomplishments of the IVCA, led by Maura and her lean team. The Fellows Award is an honor for me and my firm.

After 14 years in the business, OCA Ventures is still in the early innings – but we’re poised to achieve our goal to be a leading technology Venture Capital firm in the Midwest.  I am proud to operate the business in Chicago. There were times when we were tempted or even solicited to relocate, but candidly I cannot think of a better community to build a business and to raise a family. It’s not only an honor to receive the Fellows Award, but a privilege to be an entrepreneur and professional investor in the great city of Chicago. Thank you again for this wonderful honor.

The 2013 IVCA Awards Dinner, presented by Kirkland and Ellis LLP, will take place on December 9th, 2013, at The Four Seasons, 120 E. Delaware Street, Chicago. Individual tickets are still available, click here for information.