... 'The new firm, called MBM Capital, is raising funds to buy venture-stage companies with real revenue and products but struggling to raise additional capita

... 'The new firm, called MBM Capital, is raising funds to buy venture-stage companies with real revenue and products but struggling to raise additional capital. These companies—Ms. Bonner and Mr. Mittal call them “thoroughbreds” or “workhorses”—likely aren’t growing as quickly as other startups, and they may have operational problems that need to be addressed. The goal is to raise $75 million to $100 million and to engineer consistent five-times to 10-times return exits. Theirs isn’t venture capital, and while they will acquire and manage companies, it isn’t traditional private equity either, they said, noting that traditional buyout firms would eschew unprofitable companies, and they don’t plan to use leverage. The co-founders, who emphasize their background in turning around companies, say investing in their fund is a way to hedge soaring venture valuations. The fund will focus primarily on areas in which Ms. Bonner and Mr. Mittal have expertise, including fintech, human-resources technology and e-commerce. While valuations in the private market are soaring, MBM Capital believes it can still find relative bargains, given that the companies they are seeking often are ones venture investors are looking to quickly exit because they no longer look like they will make the unicorn grade. “A lot of companies just fail to hit that velocity, but that doesn’t mean they’re bad,” Mr. Mittal said.'