BDS Capital raising up to $40M for new tech fund

Huntington-based eGifter was one of a half-dozen tech firms that have received BDS Capital investments.

By GREGORY ZELLER // 

BDS Capital Management is doubling down on technology with a second venture fund that will invest between $25 million and $40 million, largely in Long Island startups.

The fund, BDS Venture Fund II, follows a $6.5 million pool that backed Huntington-based eGifter and former Hicksville startup ProSeeder Technologies, as well as tech startups in New York City, Boston, Detroit and the left coast.

“I would like to invest more on Long Island,” BDS founder Brian Rubenstein told Innovate LI. “I think things have improved slightly, and I’m hoping they improve more.”

rubenstein

BDS Capital Management founder Brian Rubenstein.

He prefers steering investors toward Island firms, he added, because he likes to be “close to the companies, because I can help them more when I’m around.”

One example: Rubenstein is a member of the ProSeeder board of directors.

“The closer I am, the more help I can give,” he said.

Rubenstein said he expects to have BDS Venture II up and running within the next few months, with investments focused on private companies working in mobile applications, medical devices and other tech-related sectors.

The firm also has funds that focus on public company investments and real estate.

“One of the essential ingredients for building a startup ecosystem is having multiple sources of capital, particularly at the early stages,” said Mark Lesko, executive director of Accelerate Long Island, which runs its own public-private seed fund. “So I’m happy to hear Brian is raising a significant fund right here on Long Island.”

Rubenstein is the son of prominent Long Island investor Barry Rubenstein, a founder of venture capital firm Wheatley Partners. Brian Rubenstein spent more than a decade at his father’s firm before striking out on his own in 2013.

In addition to eGifter and ProSeeder, Rubenstein’s fund took stakes in companies focused on marketing, fantasy sports, recruiting and education.