Small fund offers hope for small start-up firms
With a successful start-up under his belt, John Fraser thought it would be easier to get funding for his latest venture, Mednet United States.
He was wrong.
“It was equally difficult,” says Fraser. “I can not imagine how difficult it is even for someone without experience, but she has a very good idea.”
Fortunately for Fraser, a new venture capital fund managed by the University of St. Thomas recently invested $ 50000 in Mednet, a software company, with which doctors, hospitals, insurers and patients in ‘exchange of information and access electronically.
The Fund, Fox officially as James Rogers, MD, Health Care Fund for Innovation, will be investing at an early stage health care companies which are located in Minnesota. Fox, a former medical director of Minneapolis Public Schools and the Control Data Corp., left $ 1 million to finance, after he died in December.
Start-ups are often a difficult time, the increase in income, experts say. They are too dangerous for the large and small venture capital business. And there are not enough “Angel” investors to bridge the gap.
“Although the Twin Cities is renowned for medical products and technology, health care, there is no investment fund for small businesses,” said Mike Moore, director of the Institute William C. Norris, the Fox-Fonds.
“There are a lot of things now, he died on the vine, because there is no money in Minnesota to launch on the market.”
Seed capital is crucial
Average cycles Venture-Capital investment total of $ 5 million, $ 2 million for start-ups, said Jay Hare, a partner in the firm Price Waterhouse Coopers, auditing firm “technology industry group at Minneapolis. Fox $ 1 million fund, which invests in up to 50000 $ 75000 $ increases, it is quite difficult for a new product or service on the market, he said.
However, the funds may be useful to comply with a review of seeds, helping happen if a company to a more reasonable to increase the capital, “said Hare.
National companies, health care drew only 1 per cent or $ 69 million, to $ 7 billion in venture capital in the quality-fourth quarter, after the MoneyTree report by Price Waterhouse Coopers and the National Venture Capital Association, on the basis of data from Thomson Financial.
However, Minnesota has some promising health care focuses on the last two years.
Last year, Minneapolis start-up health RedBrick raised $ 15 million Versant Ventures in Menlo Park, California, and Highland Capital Partners of Lexington, Mass., the two companies were previously RedBrick $ 15 million. Founded in 2006, RedBrick work with large, self-insured employers and health works wellness and disease management, and training programs for business.
$ 32 million, or approximately
In 2006, the giant Dutch publication Wolters Kluwers bought ProVation Medical Inc, a software start-up local Minneapolis-based Affinity Capital Management, provided $ 112 million.
Excelsior-based Lemhi Ventures, founded by veteran Definity Health Tony Miller, invests $ 32 million in local start-ups, including Plymouth-based Carol.com, an online marketplace for health insurance, and Share Vision Inc, Minneapolis, Doctors and hospitals to send payment information via a secure broadband network for Medicare. Share vision was co-founder of Fraser.
The fact that Fox-Fund, in collaboration with Lemhi focuses exclusively on health care start-ups reflects the presence of major hospitals and insurance in the region, such as United Health Group Inc, and Medica Health Partners.
“One of the reasons why Lemhi was interesting is that these include health care,” said CEO John Feikema Share vision. “We spend a lot of time in conversation with VC [Venture Capital] companies, and they are smart man. however, health care is a complex market. Lemhi Based people like [Fox and the funds] is useful for a quantity of the firm. “
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