PART 2: Richard Dapaah decided he wanted to be a venture capitalist

(EDITOR’S NOTE: The Knoxville Entrepreneur Center (KEC) recently named two individuals as its inaugural Executives-in-Residence (EIR). They will work with the existing KEC team to focus on mentorship and strategic priorities for entrepreneurs. Each EIR will have a specific focus area in which they will create programming and provide business advisory services throughout the 12-month term. In the second article in this series, we continue our spotlight on Richard Dapaah, one of the two EIRs.)

By Tom Ballard, Chief Alliance Officer, PYA

In the first article in this series, we reviewed Richard Dapaah’s career through the time that he worked for a year at Morgan Stanley with Mary Meeker, a late-stage tech investor, leading venture capitalist and former top Wall Street Internet equity research analyst.

“After a year of providing advice to buy side investors, I wanted to become one,” he said. “So, I refocused on better understanding buy side risk analysis by working at a hedge fund.” Dapaah left Morgan Stanley for another firm – Shire Capital Management.

He was there for six years, initially joining the investment firm at its launch as the Shire’s first analyst to evaluate risk arbitrage and long/short investments for public equities. Eventually, he led private investments as part of a team into late stage tech companies.

“It was here that I found my calling,” Dapaah says. One of his first investments was in the common equity of Alibaba in late 2013, about eight months before the company went public in what was reportedly the largest global IPO (initial public offering ) ever at the time.

“Most people said that we were on a fool’s errand, because we would not make any money for our limited partners being the last in the door at such a high valuation before the IPO,” he said. “Undeterred, we stuck to our thesis, proving all naysayers wrong when at its peak share price, Alibaba’s market capitalization was more than four times higher than the valuation where we had bought the shares.” The firm went on to invest in many of the leading tech companies, such as Uber, Lyft, Xiaomi, Pinterest, Dianping and Snapchat.

In 2015 Dapaah left Shire to launch Seaford Capital Management, a late stage, tech-focused investment fund. “Seaford Capital’s investment program was in part based on unique insights that I had developed from my late-stage investing track record, tech investing trends and research I had conducted into twenty years of tech IPOs,” Dapaah explained. “These combined factors proved to me that late-stage tech was not only a true asset class but also offered one of the most attractive investment points of entry in a company’s lifecycle.”

A health scare derailed that effort for a little more than year while Dapaah focused on getting better. “It took about a year, but I was fortunate to be treated by of one of the international leaders in the field at one of the best medical centers in the world,” he said. “I fully complied with the treatment regimen, which enabled me to realize the best possible outcome.”

Now, Dapaah is a Venture Partner at FundRx, a New York City-based early stage venture fund focused on health and life science start-ups. He evaluates healthcare start-ups for seed and Series A/B funding as an extension of the firm’s investment committee. FundRx closed the first tranche of the its Fund I – FRx Select I – late last year.

Dapaah’s experience investing at various stages of the company lifecycle has led to the many conversations that he has been having within the Knoxville region and beyond about access to capital. He wants to be part of a team that lays the groundwork to eventually launch a local investment firm focused on making Pre-Series A and Series A investments. He considers Series A to be the first institutional capital on a company’s cap table, one of the key investors that the company relies on to help scale the business and the firm that steps in to help the company surmount any major roadblocks.

“This region needs patient risk capital,” Dapaah believes, a concept that most entrepreneurs and existing investors in the region would readily endorse.

As he continues to explore how to help start that fund, he’s happy to be helping at KEC.

“It’s a broad mosaic,” Dapaah says of the work he’s done thus far and the individuals with whom he has met. “Anyone building a company, regardless of vertical or industry, is going to face new challenges for the first time. I want to help them meet those challenges.”

NEXT: A conversation with Eleni Stratigeas, the other EIR.

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