There’s a common link among Orange County’s medical device industry. William Link, that is.
Link, managing director of Versant Ventures, a venture capital firm with offices in Newport Beach and Menlo Park, has been a constant in the county’s device industry as an entrepreneur, executive and investor for much of the past 30 years.
Since becoming a venture capitalist in 1998, Link’s directed money to 20 companies, half of which are or were in OC. Versant Ventures and Menlo Park’s Brentwood Venture Capital, another firm Link’s involved with, have invested nearly $200 million to date.
Before Link’s venture days, he helped create a pair of major eye device makers.
He cofounded and ran Chiron Vision Corp., a maker of eye surgery devices that was sold to Bausch & Lomb Inc. in 1997 for $310 million.
He also started an eye surgery business in 1977 while working for American Hospital Supply Corp. The business evolved into Advanced Medical Optics Inc., the Santa Ana-based contact lens care and eye surgery company that spun off from Irvine drug maker Allergan Inc. five years ago.
Including Advanced Medical and Chiron Vision, Link’s companies have created some 6,000 jobs. Fourteen of those companies are in the portfolios of Versant and Brentwood.
Link, a 61-year-old Indiana native, calls investing “kind of a seductive activity.”
From Versant’s Newport Beach office with a view of the coastline, Link focuses on finding companies.
His investments include IntraLase Corp., an Irvine eye laser maker bought by Advanced Medical this year, AcuFocus Inc., an Irvine company developing an implant to treat presbyopia, Laguna Hills-based Glaukos Corp., a glaucoma device developer, and a pair of Aliso Viejo-based eye device makers, Eyeonics Inc. and WaveTec Vision Systems Inc.
Link “understands the winners from the losers,” said Tom Bender, chief executive of Cooper Cos., a Lake Forest maker of contact lenses and women’s surgical equipment.
Hits, Misses
Link has had his shares of hits and misses.
Among the winners: IntraLase, which he first invested in at Brentwood.
A maker of laser devices used to cut a flap in the cornea as the first step in vision-correction surgery, IntraLase went public in 2004, raising $86 million.
Earlier this year, Advanced Medical paid $808 million for IntraLase.
“In the venture stage of my career, probably IntraLase is one of the graphic successes,” Link said. “Brentwood invested $18 million in IntraLase and got a return of well over $100 million.”
Among the misses: Endicor Medical, a San Clemente-based company that tried to develop a catheter-based medical device to remove coronary artery blockage.
“The clinical study proved to be very difficult with overall disappointing outcomes,” Link said.
Endicor was bought in 2001 by ev3 Inc., a Minnesota-based medical device company that has operations in OC.
The sale was for “a modest amount, providing poor returns for the investors,” Link said.
Versant, started in 1999, raises money from pension funds, university endowments and foundations.
“When we invite (investors) into our funds, we are looking for institutional money that is professionally managed and has a long-term outlook,” Link said. “Because the nature of healthcare investing is that it takes years to create value.”
Criteria
Link said he looks at management, technology, market size and how much money’s needed before investing in a company.
“For us, the actual threshold of market size for a medical device investment is that it has to be at least half a billion dollars, so it’s a big one,” he said. “Our experience is that it’s hard to do these projects well. And if you work so hard, spend years and lots of capital and end up serving a small market, then the reward is less.”
Versant looks for investments of up to $50 million, Link said.
On the oft-debated topic of whether OC has enough venture capital, Link said, “My view is that worthy people and projects find capital, and the capital doesn’t need to be local.”
The medical device veteran said he finds investing “refreshingly straightforward.”
“It was all about finding interesting opportunities, interesting projects,” he said.
Link’s role in developing OC’s eye device sector is acknowledged by industry figures.
“You have to give credit to the Gavin Herbert Jrs. and the Bill Links, because not only did they create a company, they created a culture,” said James Mazzo, Advanced Medical’s chief executive, referring to Allergan founder Herbert. “I think they saw a tremendous opportunity in Orange County.”
Link “is probably the most instrumental venture guy in the ophthalmic medical device business in my mind,” Cooper’s Bender said.
OC is “a good market, a good location” for medical devices, Link said, with companies such as Advanced Medical and Edwards Lifesciences Corp., the Irvine heart valve maker.
“What we find is that when there’s really strong corporate leadership in an area, then it’s likely there will be opportunities for device companies,” he said.
J. Andy Corley, chief executive of Eyeonics, which makes replacement lenses for cataract surgery, has known Link since 1983.
Back then, Link was president of “the original AMO,” he said.
“I was a sales rep and I was busy making him look good,” Corley said, laughing.
Link later tapped Corley to help start Chiron Vision. Some years later, Link became the first investor in Eyeonics, where he’s chairman.
The most important lesson Corley said he’s learned from Link is to “learn from your competition, and do not dismiss them as nut jobs from down the street.”
Taught Surgery
Venture investing is Link’s third major career.
Before he decided to go into medical devices, he was an assistant professor in the department of surgery at the Indiana University School of Medicine.
He got his bachelor’s, master’s and doctorate in electrical engineering from rival Purdue University.
With his Midwestern roots, Link shares a few traits with Warren Buffett. Despite his success, he’s modest and low-key. He’s been married to wife Marsha for 40 years. The couple lives in Irvine’s Turtle Rock, rather than, say, Newport Coast.
Outside the office, Link said he enjoys his “wonderful family,” which includes two grown children and two grandchildren.
He describes himself as “an active outdoors person” who plays golf, fly fishes and hikes. He’s also a pilot who’s “privileged to have my own airplane” and often flies to Colorado, where he has a second home.
