Startups, BioPharma

SV Angel goes ‘back to basics’ as partners exit

In a blog post on Medium, the seed stage investment firm stated that it is making the change as the seed investor landscape has shifted.

SV Angel, a seed stage investment group that has backed several healthcare companies, is scaling down — it won’t raise any more new funds, it will reduce investment sizes and has parted ways with its partners. The seed fund had made investments in Facebook, Twitter and Air BnB but faces a far more crowded and challenging market, according to a Medium post.

Today there are thousands of firms and individuals investing in seed rounds. Seed investors are raising larger funds, becoming more ownership-focused and investing primarily on adoption and traction. Seed investing now encompasses both backing founders at the earliest stages of a company and investing in teams with early-adoption. The amount of money raised in seed rounds has doubled and valuations have increased significantly.

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Although SV Angel Partners Brian Pokorny, Kevin Carter and Robert Pollak will stay on as advisers to SV Angel, Ron and his son Topher Conway will continue to co-manage the existing SV Angel funds. They will also go “back to basics” and continue to make investments but as angels.

Although the group’s most prominent healthcare investment, and exit, was Flatiron Health, which Roche recently acquired for $1.9 billion, it has backed several other healthcare companies spanning biotech and health IT. Among those investments are Cedara medical billing health IT business. Envisagenics is a Cold Spring Harbor Laboratory spinout that developed software that identifies RNA splicing errors and guides the discovery and development of targeted drugs that can mitigate the errors found. Other recent investments include Modern Fertility and care coordination business Karuna.

Going forward SV Angel investments will range from $25,000 to $100,000 per company. The goal is to better align the business with the founders of the company it invests in as well as with other investors.

There are many great investors that we’d like to partner with and being involved at any level in a company we like is more important to us than getting the right allocation for the fund. As this dynamic materialized more, we realized there were diverging interests between what’s best for founders and what’s best for our investors.

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