DCM-Doll Capital Management said Wednesday it led a coterie of investors to invest $92 million in Adam Aircraft, a manufacturer of very light jets.

Adam, based in Englewood, Colorado, is one of a handful of boutique companies that have made headlines recently with their “think small” approach to air travel.

The idea is to build small airplanes known as very light jets (VLJs) that can seat six to eight people, cost between $1 million to $4 million, have a range of about 1,000 miles, and land on small runways, of which there are more than 10,000 in the United States alone.

Of the U.S. players in the space, Adam Aircraft and Albuquerque-based Eclipse Aviation are locked in a dogfight. Eclipse has more money behind it and makes a smaller, cheaper, less-luxurious jet than Adam’s.

Both Eclipse and Adam are working furiously to get approval from the U.S. Federal Aviation Administration so they can start fulfilling orders—before big competitors like Honda Jet, Cessna, and others enter the competitive matrix.

That said, what’s a venture capitalist doing investing in aviation?

“We do out-of-the-box deals, and this is definitely one of those,” said DCM general partner David Chao. He noted the deal is still a technology play—just not one with which DCM would typically be associated. The firm usually invests in the software and silicon spheres.

“What’s really cool is, this is as big of a paradigm shift as when the mainframe computer went to PCs, where every Joe had access to his own computer,” said Mr. Chao. “I’m not saying the average guy can buy a $1.5-million jet, but I am saying that for even a small-to-medium size company, it would likely be cheaper to hop on one of these jets, maybe an air taxi or a charter, than to fly United.”

He added that Adam was a particularly attractive investment because it had taken less investor money.

“If you look at how much Eclipse has raised, that’s over $300 million,” said Mr. Chao. “Adam raised less than $100 million, and they’re kind of in the same spot.”

The investment is Adam’s sixth round of financing. Joining DCM in the round are new investors Mesirow Financial, W Capital Partners, DEShaw, and Acadia Woods Partners, along with previous investors Goldman Sachs and Hunt Growth Capital.

A sizable portion of the new round was also received from various new European investors. Goldman Sachs remains Adam’s largest single investor.

Backlogged Orders

The capital in question is expected to see Adam through to profitability. The company has something on the order of $800 million in backlogged orders. The prop-driven version of its jet has already received FAA certification.

Adam CFO Chris Naro hopes to have certification on the company’s A700 jet in early 2007. The funding will be used to ramp up production and streamline its manufacturing process.

Asked if he was bothered by Eclipse’s progress in the space, Mr. Naro said he thought there was more than enough room in the VLJ market for two companies. But is he worried about the arrival of Honda, which plans to offer its own small jet in the next four years? Or is four years a long enough runway to capture market share?

“Honda’s jet is bigger, it will still have to get certified, and it’s probably going to be more expensive,” said Mr. Naro. “So it’s not directly in our face.”

Contact the writer:SWolfe@RedHerring.com