A new venture fund will target Maryland companies that have been skipped over by other deep-pocketed investors who focus on technology hotbeds like Silicon Valley.
BioHealth Innovation Inc. on Tuesday announced its new $50 million BioHealth Gap fund. The fund will invest in early-stage life sciences, pharma, health IT and related companies based in central Maryland.
“We’re going to focus in a geographic region that is not one of the most popular venture capital regions in the country,” CEO Richard Bendis said Wednesday. “We think there are tremendous assets here that just don’t get the exposure they would in the more vibrant venture capital regions.”
BioHealth is a startup support organization for life sciences companies that launched in 2012. The new fund is intended to take the organization’s role in growing small companies to the next level.
In addition to life sciences, pharma and health IT companies, the fund will also target civil cyber companies — those creating cyber security resources for commercial and nonprofit organizations, such as hospitals.
BioHealth’s focus on life sciences and civil cyber ties in to what Bendis sees as the state’s greatest strengths and untapped commercial markets. Billions of federal dollars are invested in research and development at federal agencies and institutions based in Maryland. Less emphasis has been put on turning that research into commercially viable products and services.
The fund will focus on helping companies in these specialty areas bridge the gap from seed or angel funding to institutional and venture capital investors.
The fund’s investments per company will range from $500,000 to $2.5 million. Over its lifetime, Bendis expects the fund’s portfolio to include between 15 and 20 companies.
BioHealth is in the process of raising money for the fund and Bendis expects it to be fully funded within 18 months. BioHealth could close the first tranche of funding in the first quarter of 2015. The fund would need at least $20 million committed to close the first tranche.
The fund could begin making investments after closing the first tranche.