Financial mitosis

Pequot Capital Management Inc. revealed plans to split off its Pequot Ventures affiliate this June as an independent venture-capital firm, to be based in New York City.

Pequot founder Arthur Samberg created the Pequot family of funds in 1986, and in 1996 the Westport-based company created Pequot Ventures to provide capital to high-tech startups. Today Pequot Ventures has about $2 billion in capital commitments.

Combined, Pequot Capital and Pequot Ventures have 230 employees. Pequot Ventures indicated it would take a dozen investment financiers with it, planning to operate under the name FirstMark Capital L.L.C.

It would not be the first time Pequot has spawned a splinter tribe ”“ in April 2001, Pequot veteran David Benton left with 90 employees to start up Andor Capital Management, which has offices in Greenwich and New York City.

Pequot Ventures has been functioning autonomously for some time, according to Larry Lenihan Jr., managing director of Pequot Ventures., and he said the new FirstMark Capital will be better positioned to develop new business.

Lenihan co-founded Pequot Ventures after previously working for IBM Corp. and Broadview Associates L.L.C. Pequot Ventures”™ other managing director Gerald Poch previously worked for the GE Capital division of Fairfield-based General Electric Co.

Over a dozen years, Pequot Ventures produced several large returns for its Westport parent company, including Flarion Technologies, a Bedminster, N.J., wireless networking company acquired in 2005 by Qualcomm Inc. for $800 million after just five years in business; and StubHub Inc., an online ticket site poached for $310 million in 2007 by eBay Inc.

Locally, Pequot Ventures backed OutlookSoft Corp., a Stamford company that programmed software to help companies analyze the financial performance of various divisions. SAP AG acquired OutlookSoft in June 2007, but has yet to reveal the purchase price, which various media outlets pegged between $200 million and $400 million.

Pequot Ventures was also an investor in MTM Technologies Inc., which lost $32 million on $275 million in revenue in its 2007 fiscal year; and in KaVaDo Inc., which is no longer in business.