MADISON, Wis., and ANN ARBOR, Mich. – Venture Investors LLC, a venture capital firm that is principally focused on initiating investments during the formative stages of technology and biotechnology companies that have spun out of leading research institutions in Wisconsin, Michigan and the Midwest, announced today it held its final closing for its new fund – Venture Investors Early Stage Fund IV Limited Partnership, with $115 million in total commitments.
This fund will be among the largest Midwest-focused, early-stage venture capital funds and the firm has offices strategically located next to the nation’s third- and fourth-largest research universities (University of Michigan and the University of Wisconsin-Madison). Venture Investors will continue its proven strategy of investing in seed and early-stage companies that are formed to commercialize discoveries in life sciences, engineering, and information technology sectors, and from interdisciplinary interaction between researchers in these fields. The firm’s investments have included 19 companies that were spin-outs of seven leading research universities in the Midwest. Venture Investors typically invests between $500,000 and $2.5 million in a first-round financing and up to a total of $10 million in a portfolio company over time.
Commitments to Venture Investors Early Stage Fund IV Limited Partnership came from a combination of new and returning limited partners. Returning investors included the State of Wisconsin Investment Board, American Family Insurance, Wisconsin Alumni Research Foundation, US Bank, Robert W. Baird & Co., and MGE Energy. Among the new investors were funds managed by Credit Suisse’s Customized Fund Investment Group for the Venture Michigan Fund, the Michigan Strategic Fund, and the State of Michigan Retirement Systems. Other new investors included Sentry Insurance, WEA Insurance, Northwestern Mutual, Thrivent Financial, Briggs and Stratton Pension Fund.
“We are pleased that our investors have confidence in our team’s ability to continue to deliver returns from the untapped opportunity in the Midwest”, said John Neis, a Managing Director of Venture Investors. “We have repeatedly demonstrated that, with adequate funding and a strong investor syndicate, you can assemble high-caliber management teams around the world-class discoveries emerging from our region’s leading research universities and deliver results that are competitive with the top-tier venture capital firms on the coasts.”
The $115 million fund represents more than a threefold increase from the $37 million Venture Investors Early Stage Fund III, raised in 2000. That fund invested in 18 companies, 14 of which were spin-outs of research universities in the Midwest, including nine of which spun out of the University of Wisconsin-Madison. Venture Investors is headquartered in Madison. Three of those companies have completed initial public offerings (TomoTherapy and Third Wave Technologies, which were University of Wisconsin-Madison spin-outs, and IntraLase, which was a University of Michigan spin-out) and a fourth had filed for an initial public offering before announcing that it is being acquired (NimbleGen Systems, a University of Wisconsin-Madison spin-out).
Venture Investors has assembled a team that brings together a combination of venture capital and entrepreneurial experience, with backgrounds that include several scientific and business disciplines. Managing Directors John Neis, Roger Ganser, Scott Button, and George Arida were managers of the previous fund. Winslow Sargeant, a successful entrepreneur, Paul Weiss, former President of a portfolio company, and Jim Adox, who had co-invested with Venture Investors as a partner at another fund, have joined the firm as a Managing Directors. Adox is in the Ann Arbor office and the rest of the team is based in Madison.
Venture Investors had announced its first closing on $69 million of the $115 million total in 2006. The firm has already made five investments out of the 20 companies the firm expects to back with the fund:
· Virent Energy Systems is a clean technology company that is a developer of a highly efficient, radically simple, single-step catalytic process that extracts more total energy from available land without threatening the food supply. Virent’s BioFormingTM process converts sugar-based feedstocks into a wide range of renewable gases, liquid fuels and chemicals. Virent is a University of Wisconsin-Madison spin-out. (www.virent.com)
· Caden BioSciences is a life sciences tools and services company developing assays for G-Protein Coupled Receptors (GPCRs). GPCRs have been implicated in every major disease category, and thus are a very attractive and well validated class of drug targets. Caden is a spin-out of Northwestern University.(www.cadenbiosciences.com)
· Mithridion is a biopharmaceutical company that is engaged in the discovery and development of drugs for neurodegenerative diseases, with a focus on Alzheimer’s disease. Mithridion is a University of Wisconsin-Madison spin-out. (www.mithridion.com)
· Incept BioSystems is the developer of products to improve the viability of embryos cultured during in vitro fertilization (IVF). Incept’s initial device mimics the chemical environment and mechanical stimulation that embryos experience in the fallopian tube, which has shown to substantially improve the developmental rate and quality of embryos cultured in the system, a highly valuable result for couples undergoing costly IVF treatments. Incept is a University of Michigan spin-out. (www.inceptbio.com)
· Procertus BioPharm is an oncology-based pharmaceutical company whose primary mission is to protect cancer patients against the side effects of chemotherapy and radiotherapy. Procertus is a University of Wisconsin-Madison spin-out. (www.procertus.com)
“Over the last two decades, we have been highly focused on leading venture capital investments in companies where founders and management teams are commercializing breakthrough discoveries to solve real world problems.” said Scott Button, a Venture Investors Managing Director. “We look forward to helping the next generation of researchers and entrepreneurs achieve success and in doing so, building value for both the entrepreneurs and our investors.”
About Venture Investors LLC
Venture Investors is a venture capital firm with $200 million under management. The firm invests in seed and early-stage life science and technology companies in the Midwest, with a primary focus on opportunities that spin out of the region’s leading research universities. Formed in 1982, Venture Investors has offices strategically located next to the country’s third and fourth largest research institutions in Ann Arbor, Mich., and Madison, Wis. For additional information on the firm, visit www.ventureinvestors.com