Ocean Azul – A David in Goliath-land

In a Venture Capital World Flush With Funds and Massive Investment Firms, Local VC Ocean Azul Stays Close to Its Clients.

In the world of venture capital, some companies “spray and pray” – that is, they spread lots of money around and hope that one of their many investments pays off big. Not Ocean Azul Partners.

The small Coral Gables firm entered the VC scene five years ago, led by partners who’d made their mark operating and developing companies, not in finance. The group sees its strength in sharing management expertise to help select start-ups grow, especially local tech ventures. The partners invest in a small number of young companies and work actively inside those businesses, serving on their boards of directors and helping founders scale up operations when needed.

“We never want to be just money for ventures,” says Salomon Sredni, one of Ocean Azul’s five founding partners. “If you want to have impact, you have to be in the room where it happens.”

The partners’ hands-on approach seems to be working. In 2021, Ocean Azul raised more than $40 million for new investments, building on an initial $14 million in funding. In April of this year, the group scored its first major payoff when one of the tech ventures it funded, Dade Systems, was sold. The group earned back about four times what it invested, says Sredni.

“And we’re just getting started,” says the Colombia-born executive raised in Miami Beach.

Ocean Azul took shape in an unusual way – or what Sredni calls “a story of how you never burn bridges.” The four elder partners had worked together three decades ago in Miami at Arthur Andersen, the accounting and consulting firm. Bill Pruitt had been their manager. Pruitt became a top executive at Andersen, earning a reputation for his “Midas touch.” The others moved on. Sredni became CEO at TradeStation, taking that tech company public on Wall Street.

In 2017, Pruitt approached his former colleagues about creating a VC group in South Florida. Sredni insisted he knew nothing about finance, but Pruitt played up the managerial approach. He agreed to join, as did Alex Tellez and David Zinn. “Nobody says no to Midas,” jokes Sredni.

The group then added a fifth, younger partner with VC experience: Tellez’s daughter, Lisette. As a student at Massachusetts Institute of Technology, she managed the Boston team of the Dorm Room Fund, financing startups by fellow college students.

Ocean Azul typically invests between $250,000 and $2 million in the seed capital or Series A funding round of startups or early-stage companies. It works mainly with business-to-business software or “deep tech” ventures. The group does not accept cold calls for funding, but relies on referrals from its own network. Sredni estimates that just one in every 150 referrals gets funding. That’s partly because every VC decision has to be unanimous, he says.

Ocean Azul chose Coral Gables as its headquarters because of the city’s central location, beauty, and “the truth is, we got a good office deal,” Sredni says. And some of the dozen-plus ventures it has funded are based nearby, including Coconut Grove’s tax fulfillment app TaxFyle.

Richard Lavina, Taxfyle’s CEO, calls the operating experience of Ocean Azul’s principals “something we look for” in VC partners and “huge.” Ocean Azul’s team has helped TaxFyle with everything from how to structure new funding rounds to how to form a board subcommittee. Says Lavina: “They don’t just bring money to the table.”