Local investing by venture capital firms dropped in 2012 following a spike a year earlier.
The 10 largest venture capital firms with headquarters or offices in Orange County collectively invested $49.5 million in OC-based companies, according to this week’s Business Journal list, which ranks firms based on dollar amounts invested in local companies in 2012.
The firms on this week’s list collectively have about $2.65 billion in funds under management, flat from a year ago.
A single firm reported an increase in OC investments year over year, while five reported declines, and one kept its investment amounts flat. Two venture capital firms on the list haven’t made investments for at least two years. Neither firm could be reached for comment. Figures for one firm were based on Business Journal estimates.
The total on this week’s list is a 30.1% decrease from 2011. It’s about equal with the average investment amounts in previous years—$41 million in 2010 and $54 million in 2009. Last year’s spike came on big increases by a couple of the largest firms here.
This year’s decline also appears to reflect a trend of VC firms making smaller investments at earlier stages (see related story, page 1).
• Versant Venture Management LLC, which climbed one spot on the list despite an 11% drop to $22.9 million in investments, was the largest backer of OC-based companies last year.
The Menlo Park-based firm has an office in Newport Beach that houses a team of five, down from eight a year earlier. The difference includes the departure of Kirk Nielsen, a managing partner who left Newport Beach last June for the Twin Cities, where Versant opened an office to focus on investments in Minnesota and neighboring states.
Versant specializes in early-stage medical device and biotechnology companies. It has about $1.59 billion in funds under management overall. The company also was among the first tenants at a new business accelerator center in Rochester, Minn., established by Rochester Area Economic Development Inc. and Mayo Clinic. The center will house early-stage companies in the biotechnology industry, which Versant and other venture capital firms are expected to help find capital.
• Irvine-based Sail Capital Partners LLC slipped to No. 2, with $18.5 million in OC investments last year, down 46% from the prior year. Sail Capital focuses on clean-technology companies. It has six OC companies in its portfolio, including Aliso Viejo-based CNS Response Inc. and Irvine-based Ener-Core Inc., which recently split off from Portsmouth, N.H.-based FlexEnergy Inc., which also has an office in Irvine.
Sail Capital is active in Canada, where it has teamed with other investment firms in a number of ventures. The firm launched a $100 million fund last year through its early- and midstage arm, Sail Venture Partners, in partnership with Stifel Nicolaus Canada Inc., part of St. Louis-based Stifel Financial Corp.
Sail Capital also brought on David Miller, a former mayor of Toronto, to its advisory board last fall.
• No. 3 Miramar Venture Partners in Corona del Mar provided about $3.2 million to OC-based companies last year, down about 27% from the prior year. Miramar focuses on early-stage companies in the information technology sector, with an eye toward startups based in Southern California.
The firm has about $125 million in funds under management and is set to launch a $50 million fund this month (see related story, page 3).
Miramar’s latest investments include participating in an $18.7 million funding round for Denver-based medical software startup Welltok Inc., which recently appointed OC-based healthcare industry veteran Jeff Margolis as chief executive. Margolis is chairman emeritus of healthcare software company TriZetto Group Inc., which he started in Newport Beach in 1997 and sold in 2008 to New York-based private equity firm Apax Partners Inc. for $1.4 billion.
• Another OC investor in the Welltok funding round was Laguna Beach-based Okapi Venture Capital LLC, which made No. 4 on this week’s list.
The firm invested $3.1 million in local companies last year, down 16% year over year.
Okapi currently manages $47 million in funds overall, unchanged from a year ago.
• The MedFocus Family of Funds moved up one spot to No. 5 with the increase of its investments in OC-based companies.
The group of four funds, which is run by MedFocus Management Co. in Irvine, put about $1.3 million into OC companies, up nearly 53% from the year-ago total of about $867,000. It funded about $505,000 to non-OC companies.
“Our increase in investment activity was a result of follow-on investments in current portfolio companies,” Vice President Tracy Pearson said.
OC investments accounted for four out of six deals and included Reverse Medical Corp. and Interventional Spine Inc., both in Irvine and in the “early commercialization” stage, which Pearson described as the “capital-intensive stage of development.”
MedFocus has about $22.1 million in funds under management overall, down about 3% year over year.
• No. 8 Palomar Ventures in Irvine made no investments in local companies last year, compared with about $1.6 million in 2011. The de-cline pushed the firm down three spots on the list.
Palomar has about $525 million in overall funds under management.
Download the 2013 OC’s LARGEST VENTURE CAPITAL FIRMS list (pdf)
