Sunday, January 7, 2007

5AM Ventures Closes $150M Fund II - I’m In!



I am thrilled to report the recent closing of 5AM Ventures Fund II.

Thrilled, in part, because I am lucky enough to be a Limited Partner in the fund!

Fund II is a $150M fund focused on early-stage biotechnology and medical device companies. VentureWire Professional reports it here (subscription required). In particular:
5AM Ventures has closed its second health care venture fund at $150 million and has funded three early-stage companies from the new vehicle, Managing Partner Andrew J. Schwab told VentureWire.

The Menlo Park, Calif., firm held a final closing on Dec. 19 for the fund, which had a $150 million target. The fund more than doubles the $65 million debut partnership the firm raised in 2003.

So, why did I invest in 5AM Ventures (and, indirectly, in their Portfolio companies)? Simple:

  1. I always invest in the people. John Diekman, Andy Schwab, and Scott Rocklage are guys with the proper moral compass. I've spent a lot of time with these guys, and their entire team, and consider myself lucky to know them all. In addition to being very good and knowledgeable investors, they are very good people. In my most recent interaction with John, as an example, it was natural for me to end my time with him with the following: "John, you are a consummate gentleman, generous, and gracious." If you know John, you will know what I'm talking about. 5AM Ventures has also assembled an extremely impressive Scientific Advisory Board which brings them some clear advantages.

  2. I always invest in the market. The biotechnology and medical devices markets are focused on bringing life-changing advances to mankind. These are big-money markets today, and the next 10 years will see some amazing breakthroughs (pay no attention to my review of Next). Early-stage investors, like 5AM Ventures, are investing at the right time to see some seriously big returns. At $150M, it's a relatively small fund for biotech (which, I think is to their advantage), but the likes of John, Andy, and Scott have the knowledge and contacts to find and win the right to invest and grow the best companies. In essence, a smaller fund focused on early-stage investments with a well-connected team in a booming and liquid sector means, to me, that their chance for one or two very big wins are higher than most.

  3. I always invest in firms that can execute. 5AM Ventures is young, to be sure. Founded in 2003 with a $65M Fund I means that there has not been much time to measure their success as a firm. However, their portfolio speaks for itself. That's great progress for a $65M fund over a 3-year investment period. VentureWire reports that Fund II already has 3 investments in Fund II (which are not yet on the Portfolio page).


Bottom line: I don't know how to invest in biotech. I believe in the market and the timing for the market, but I couldn't pick the winners. No chance. I'll stick to what I know (Enterprise/IT, Virtualization, Open Source, Mobile, Internet Services) and leave the biotech space to these folks, thank you. I'll invest in the investors and, wherever I can, help them be successful.

Best of luck to the entire 5AM Ventures team!

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3 comments:

  1. [...] "About one-third of the money is going into Life Science". Good thing I’m invested in 5AM Ventures! [...]

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  2. [...] “About one-third of the money is going into Life Science”. Good thing I’m invested in 5AM Ventures! [...]

    ReplyDelete