Orange County, a nerve center for medical device companies, just got a new incubator fund that aims to speed development of new biomedical businesses.
Michael Henson, chairman of Irvine-based Radiance Medical Systems Inc., launched MedFocus Fund LLC late last month with $22 million from Tokyo-based venture capital firm Japan Asia Investment Co. and a group of undisclosed private investors.
“I’ve been doing this for 15 years. I wanted a more formal way to incubate companies,” Henson said. “I’ve spent my whole life in medical technologies. That’s what I know.”
MedFocus plans to invest in Southern California companies, preferably those in Orange County, Henson said. As for investment criteria: “The technologies must be revolutionary, as well as evolutionary. We want to start breakthrough companies, not (those) that are just a little bit better,” he said.
Specifically, MedFo-cus is interested in technologies that could, say, treat diseases without surgery, he said.
Investment candidates are expected to have inventor involvement and “capability to attract funding,” Henson said. The incubator plans to fund companies that are three to five years away from an initial public offering, he said.
MedFocus hopes to make its initial investment in the first quarter, Henson said.
“We only plan to fund one or two companies a year. This isn’t a traditional venture capital firm,” he said.
Funding a small number of companies, Henson said, will allow more management involvement with portfolio companies. Besides financial resources, MedFocus plans to offer business strategy and management guidance to the companies it funds.
Henson said he’s worked in the past with Japan Asia Investment, one of the largest public venture capital companies in Japan.
MedFocus plans to set up next to Radiance in Irvine but will be run separately. The fund won’t have to troll for funding prospects, according to Henson.
“There are many new ideas that are presented to me everyday,” he said. “The key is to link novel ideas with good teams of people.”
In addition to his Radiance duties, Henson serves on the boards of four privately held device companies, including EndoLogix Inc., another Irvine-based company. Radiance makes catheters used to treat vascular diseases.
Henson helped start and grow EndoSonics Corp., which was sold last year to Jomed NV, a Netherlands-based device maker, and Sunnyvale-based InnerDyne Inc., which makes minimally invasive surgical products. n
