Private Equity Solutions

More Midwest Seed-Stage Life Science VCs

Private Equity Fund Of Funds By Michael Rosen • 08/02/04 The Dave Clark Five song Bits and Pieces is a good metaphor for the apparently holey (as in Swiss cheese) tapestry of Midwest VC seed and early stage financing efforts to get life science companies off the ground.

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Curve Equity Exposed Fund This weeks column will try to knit together some of these pieces so the tapestry doesnt fall apart. Last weeks column evoked responses from a number of readers who remarked on my negligence in mentioning other seed and early stage life science VCs or angel groups operating in the Midwest.

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Equity Income Funds Some new groups came to my attention and I realized that I forgot a few others. Surprisingly, there are more than I thought. As we cant have enough of these groups in the Midwest, here we go:

Wisconsin

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Capital Casebook Equity Wisconsin Investment Partners (WIP)

FF&P Private Equity provides its clients with the opportunity to invest in the equity of high growth, unquoted companies whose objective is to generate attractive returns through the subsequent listing, or trade sale, of these companies. FF&P Private Equity invests typically â5 million to â25 million of equity per transaction and places particular emphasis on backing commercial managers with a track record in successful execution of business plans and enhancing shareholder value. //www.ffandp. equity.

Private Investment In Public WIP in Madison, Wis. is an organized angel group thats headed by Dick Leazer (the former head of WARF) and Terry Sivisend (the co-founder of PanVera, Mirus and a few other biotechs).

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Equity Mutual Funds WIP focuses on early stage life science (biopharmaceuticals, medical devices and computer software) companies and has invested in a number of biotech companies in the Midwest (including ConjuGon).

Birmingham Contact Equity Mason Wells Biomedical Fund I

Private Equity Investment Firm This private equity group has more than $375 million under management in several funds (one of which is focused on biotechnology and medical devices).

Complying Deal Equity Funds Mason Wells in Milwaukee was started in 1982 and is funded by major capital commitments from the merchant bank Marshall & Ilsley, Northwestern Mutual Life, U.S. Bancorp, Newell Rubbermaid and the State of Wisconsin Investment Board (SWIB). The fund invests between $500,000 and $8 million per company and focuses primarily on the Midwest. The size of this fund isnt clear.

Equity Msn Private Wyoming Portfolio companies include CHF Medical Solutions (a medical device company in Minneapolis), OpGen (in Madison), TeraMedica (a medical imaging company in Milwaukee) and Deltanoid Pharmaceuticals (in Madison).

American Equity Investment Frazier Healthcare Ventures

Equity Index Funds This California-based VC has set up shop in Madison as a result of having won (along with Baird Venture Partners) the latest round of SWIB Midwest start-up company funding.

Equity Private Team Wyoming By the way, according to the SWIB Web site, SWIB has pored into the coffers of four VCs $135 million during the last four years for investing in Wisconsin and other Midwest high-tech and biotech start-ups. This investment started in 2000 with $25 million into the Mason Wells fund and $20 million in the Venture Investor Early Stage III Fund.

Equity Group Investment In 2003, Baird Venture Partners (in Chicago and Madison) received $30 million for its start-up company fund. Baird, by the way, has ramped up its organization recently by hiring Pete Shagory from Vector Fund Management to run its life science business.

Capital Development Equity But back to Frazier, which has the lions share of investment from SWIB (or $60 million this year). In total, Frazier has about $450 million under management and focuses exclusively on health care (including biotech, medical devices and health-care services).

Article Between Difference Fraziers Web site shows only three investments to date in Midwest companies. Two of them are medical device companies: CVRx (in Maple Grove, Minn.) and Diametrics Medical (in Minneapolis). The third is a drug company: QuatRx Pharmaceuticals (in Ann Arbor, Mich.).

Contact Equity Private Wyoming With $60 million of SWIBs money under its belt and an office in Madison, youve got to believe they are troving for technologies and companies. We will continue to monitor this company. Other than Steve Burrills Burrill & Co, its the only west coast VC/fund that has active investments and interest in the Midwest.

Illinois

Agreement Equity Investment Tri-County Venture Capital Fund

Business Equity Funds This new fund is a subsidiary of the Heartland Capital Network, which is a consortium of financing programs for business ventures in the greater Peoria, Ill. region.

Private Equity Fund The new seed-stage fund, which initially consisted of $2 million, has resulted from the efforts of Peoria community leaders Glen Barton (former president and CEO of Caterpillar, which is headquartered in Peoria) and Doug Stewart, regional vice president of National City Bank.

Investment Property Home The fund is managed by Jim McConoughey, president and CEO of the Heartland Capital Network. It made its first investment last month in Chicago and Peoria biotech company zuChem. This first investment was $200,000. Though I couldnt find a Web site for this new fund, further information about the fund can be found by contacting Kyle Ham at 309-495-5924 or here.

Managed Equity Funds This particular fund is a type of follow-on fund that will work with other larger funds to meet the investment needs of growing companies.

Capital Entrepreneurial Equity Other components of the Heartland Capital Network include an angel network (which meets bimonthly to review tech investment opportunities), a network of Midwest VC contacts and a handful of other financing options with state programs and loan programs.

Private Equity Hedge Funds Biotechnology Research and Development Corporation (BRDC)

Email Equity Private Wyoming BRDC in Peoria is a unique biotechnology consortium that combines government, academia and the private sector in close working relationships. As a consortium, BRDC is a research management corporation thats owned by its corporate sponsors (each which has a stock equity position in the consortium).

Equity Loan On Investment These equity partners include small publicly owned biotechnology companies and some of the recognized world leaders in agriculture, biotechnology and health care. Its corporate sponsors include Monsanto, BASF, Cargill Dow Polymers, Central Illinois Light, Dow Chemical, Ft. Dodge Animal Health, PIC International Group, Seminis Vegetable Seeds, Tyco and the U.S. Department of Agriculture.

Equity Income Mutual Funds Given its location, the main thrust of this organization seems to be in technologies and companies related to the fields of animal sciences, plant science, biocatalysts, materials sciences and instrumentation.

Private Equity Group The consortium funds university research and has taken an equity position in companies such as zuChem and Fruitspheres in Peoria. While its not clear if there is a fund here or how the funding works, it seems an interesting approach to the agricultural sector.

Michigan

Private Investment Public Apjohn Group

Real Estate Private Equity The eight founding partners of this Kalamazoo, Mich. group all were senior executives of the Upjohn Company and Pharmacia, which acquired Upjohn during the mid-1990s (and subsequently by Pfizer in 2003).

Contact Equity Private Us The Apjohn Group bills itself as a life science business accelerator in the fields of drugs, diagnostics, medical devices, genomics, proteomics and bioinformatics. The group launched the Apjohn Ventures Fund in 2003. In addition to an equity position, it provides management leadership and services to the companies in which it invests.

Real Estate Equity Investment It also bills itself as a group thats networked with other local and national angel groups and VCs so as to bring in other financing to a company.

Structuring Venture Capital It currently has investments in three biotech companies: Nephros Therapeutics (in Ann Arbor, Mich. and Rhode Island), SenseGene Therapeutics (in Kalamazoo) and Afmedica (in Kalamazoo). The fund appears to currently be at about $25 million, which includes a $1.5 million investment by the state of Michigan.

Equity Private Quebec Team The fund looks at 300 deals per year and plans to invest in three to six deals/companies per year with an average investment ranging from $250,000 to $2 million.

Equity Mail Private Wyoming EDF Ventures

Investment Home Equtiy Loan Founded in 1987, EDF in Ann Arbor has about $117 million under management in three funds. It focuses on health care and information technology that has originated in the Midwest.

Private Equity Jobs EDF has assisted 30 companies from the start-up phase with 17 companies based on technology licensed from universities. EDF currently has 13 active investments (of which five are in the health-care space). It initially invests from $500,000 to $2 million per company and can do follow-on investments up to $4 million.

Equity Investment Strategy While most of these investments may have started in the Midwest, EDF seems to have migrated out of the Midwest with further later-stage investments. Still, this is an interesting group to be watching.

Missouri

Education Equity Investment Prolog Ventures

Private Equity Company Located in the St. Louis area of Clayton, Prolog closed its first fund in 2001 with investors Alafi Capital, the Danforth Foundation, Monsanto, Saint Louis University, Carpenters Union Pension Trust Fund, Stifel Financial, the University of Missouri and Washington University.

Equity Guide In Investment While the size of this fund isnt clear, Prolog typically invests in Missouri-based companies in the life sciences, health care and related information technology.

Contact Equity Private Quebec It has investments in 11 companies: APT Therapeutics, Chlorogen, Divergence, Efficas, Everest, Inoveon, Metaphore Pharmaceuticals, Quick Study Radiology, Singulex, Stereotaxis and Symbiotics. Prolog management gets actively involved with each of its companies.

Home Equity Investment RiverVest

Dimension Equity In Private Unlike its fellow fund in St. Louis, RiverVest in St. Louis doesnt only invest in Missouri companies. While its investments in 11 companies also include west coast-based companies, the preponderance does seem to be in the Midwest and Missouri.

Credit Equity Home Investment These companies include Cydex (in Overland, Kan.), Auxeris Therapeutics (in St. Louis), Centerre Healthcare (in St. Louis), Velocimed (in Minneapolis) and Kereos (in St. Louis).

Private Equity Investor While the size of their fund isnt clear, RiverVest is investing in medical devices, biotech, specialty pharma and tools for drug discovery. Investments range from $500,000 to $3 million initially and total investments up to $4 to $6 million per company. From its quarterly newsletter, it appears that RiverVest has about $89 million in its fund.

Equity Guarantee Insurance Wrapping Up Midwest Seed, Early Stage Life Science Funding

Private Equity Analyst Though the Midwest doesnt have the cluster concentration of seed and early stage funding in Boston, San Francisco, San Diego or Seattle, it is encouraging that there are more early stage groups (VCs and angels) to support our Midwest life science efforts than meets the eye.

Equity Investment Policy Im sure I have missed some as wellas I didnt even cover Ohio, Indiana or Iowa in this review. If any readers of this column are aware of other groups, please let me know and I will be happy to include them in future columns. See you next week!

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Michael S. Rosen is president and CEO of Barbeau Pharma and a founder and board member of the Illinois Biotechnology Industry Organization (IBIO). He can be reached at rosenmichaels@aol.com. This article has been syndicated on the Wisconsin Technology Network courtesy of ePrairie, a user-driven business and technology news community distributed via the Web, the wireless Web and free daily e-mail newsletters. They can be found at www.eprairie.com.

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The opinions expressed herein or statements made in the above column are solely those of the author, & do not necessarily reflect the views of The Wisconsin Technology Network, LLC. (WTN). WTN, LLC accepts no legal liability or responsibility for any claims made or opinions expressed herein.

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