For VCs who live nowhere near hotbeds such as Boston, San Diego, or DC, hobnobbing with other VCs can be, well, inconvenient. Nobody’s more aware of this than Dan Broderick, managing director at Wisconsin venture firm Mason Wells, who says that less face time tends to mean fewer joint deals, and investment rounds for venture-funded companies that are lower than they could have been.
That’s why Broderick, who joined Mason Wells in the spring of 2000, got together with Greg Johnson at Missouri’s Prolog Ventures to organize what has become the MidAmerica Healthcare Investors Syndicate — a solution that Broderick sees as a way to give Midwest and other regional VCs more “collective oomph” for their buck. The syndicate, which has no membership fee, is open to all middle-America VCs with more than $10 million under management. The focus on healthcare assures that members are comfortable with jargon and markets, so deals and technologies can be easily understood.
Broderick planned the first meeting for June 2002 and hoped to get 12 or 15 people from five or six firms. Instead, 49 members from 27 firms showed up for the first quarterly meeting, held at a hotel near Chicago’s O’Hare airport (hey, no one said it was glamorous). “You come in on a Thursday late afternoon, have drinks and dinner,” Broderick says. Friday morning is the meeting, and people are set to head home by lunchtime.
At the second meeting, various VCs presented seven different investment opportunities, including a microarray company and two genomics companies. The syndicate’s next meeting will take place this month at the Hyatt Regency by O’Hare. The idea is to include more VC firms in each company’s multi-investor deals, giving everyone a bigger investing pool and more clout to counter mega-VC companies in major cities. It also saves time: one firm will lead due diligence efforts, and other funds that follow on can trust the deal is sound.
An incidental goal of the syndicate is to regionalize VC fairs. Currently, each state hosts one or two fairs, and with 14 states in the area, VCs are hard-pressed to attend more than a handful. “We would prefer fewer fairs,” Broderick says, “then we’ll attend them in greater numbers.”
Other possibilities under discussion include forming closer alliances with tech transfer offices and having a shared entrepreneur-in-residence program.
— Meredith Salisbury