New Fund to Invest in High-Tech, Medical Firms
A new venture capital fund planning to invest about $25 million in high-technology and medical companies in the next five years was launched Wednesday in Orange County.
The fund, Enterprise Partners, which has already raised $15 million, and is co-sponsored by Hambrect & Quist of San Francisco and the Mayfield Fund in Menlo Park, according to Charles Martin, general partner of the new fund.
“What sets us apart from other (local) funds is that we have 20 individuals who have built successful companies, who have invested their own money and plan to be a resource for the companies we help,” said Martin in an interview. He said the executives will serve as advisers to the companies funded by Enterprise Partners.
“Orange County is becoming the Silicon Valley of medical technology and health care,” said Martin, adding that the fund will focus on backing high-risk, high-potential technology companies in Orange County and Southern California.
Enterprise Partners joins a dozen or so venture capital funds with offices in Orange County. These funds are available to serve Orange County’s 1,500 high-technology firms. By comparison, the Silicon Valley has more than 60 venture capital firms servicing about 3,000 high-tech companies.
According to a recent study by the Venture Capital Journal, businesses in Los Angeles, Orange and San Diego counties received $364 million in venture funds in 1982, more than double the $180 million that venture capitalists provided the region in 1981.
“I estimate that 85% of all the venture capital funds come from outside of our region, yet Southern California is the second largest recipient of venture capital,” said Martin.
Martin said investors in the Enterprise Partners fund include Harvard University, the World Bank, London-based G.T. Capital, New York-based Rho Management and Horsley-Keogh Associates. Now operating out of Martin’s Irvine offices, the new fund will have its own offices in Irvine or Newport Beach.
Hambrecht & Quist is a leading high-technology investment banking firm with about $400 million of venture capital under its management. Hambrecht, which invested $1 million in Enterprise Partners, has invested in a portfolio of about 225 firms. Mayfield has about $200 million of capital and has invested in more than 100 companies, Martin said.
