Who will be the next Medtronic? What will be Minnesota's next breakthrough industry? James Walsh will provide the latest information and commentary on the people, companies and trends driving innovation in Minnesota. From visionary entrepreneurs to game changing technologies, this blog offers a window into the future of Minnesota's economy.
It’s a challenging environment to raise money for venture funds, but Buzz Benson, managing director for SightLine Partners says he’s up to the task.
Benson is in the process of raising a $100 million fund and he’s already secured an undisclosed portion of that money. He said he expects to compete the fundraising by the end of the calendar year.
“There’s definitely a need for more med tech funds in the marketplace,” Benson said. He declined to elaborate on the details of the fund due to rules under the U.S. Securities and Exchange Commission.
Raising venture funds to finance medical technology start-ups has been difficult because institutional investors are concerned they will not get paid as fast or generously enough for the risk they are taking.
When asked how he will overcome that challenge, Benson said, “Our fund life is seven years, so we’re approaching it a little bit differently in our segment.”
The overall venture industry has been undergoing a lot of consolidation, with fewer new funds and dollars for firms. In the first quarter, 42 U.S. venture firms raised $4.9 billion, a 35 percent decrease in money raised compared to a year ago, according to the National Venture Capital Association and Thomson Reuters.
SightLine Partners considers itself the successor firm to Piper Jaffray Ventures. SightLine acquired the health care venture capital operations in 2004.
The venture firm lists five medical device firms in its current portfolio on its website: Minnetonka-based Anulex Inc., Maple Grove-based CVRx Inc., Mountain View, Calif.-based Broncus Technologies Inc., Raleigh-based LipoScience Inc. and Worchester, Mass.-based Verax Biomedical Inc.