Venture Update: Volume VII, Number 3, April 2003
Deals
RTP - The Aurora Funds (www.aurorafunds.com), an early stage venture capital firm targeting the Southeast, has raised $85 million for its fourth investment fund. The fund, which was $10 million more than Aurora originally planned to raise, attracted several new investors including GoldenLEAF, Jones Investment Fund, Comerica Capital Advisors Inc., Louisiana Economic Development Corp, Montagu Newhall, RBC Centura, and Cape Fear Memorial Foundation. Several previous investors, including Duke Management Company, the North Carolina Biotechnology Center, SHV Capital Ventures, and Silicon Valley Bank also participated. With the addition of this latest fund, The Aurora Funds currently manages more than $150 million in four venture funds and has invested in more than 35 early stage companies since 1995. Contact Jeff Clark (919.484.0400).
Charlotte - CapitalSouth Partners (www.capitalsouthpartners.com), which provides private equity capital and mezzanine capital to middle-market companies in the Southeast, has announced the initial closing of its Fund II, which is worth a total of $80 million. In addition, the firm has recently opened new offices in Tampa and Raleigh. Jack McGlinn will head the new office in Raleigh, located off Glenwood Avenue. Founded in 1998, CapitalSouth manages two private equity funds with total investment capital over $120 million. The group focuses on middle-market companies that have historical earnings of at least $1 million with positive revenue growth, company officials said. Contact Jack McGlinn (919.863.9936).
Raleigh - PharmaNetics (www.pharmanetics.com) has completed a $9.58 million private placement of preferred stock convertible into common stock at $6.00 per share. Baltimore-based Camden Partners, a health care private equity fund, led the investment. PharmaNetics is developing a technology that allows physicians to monitor the effect of drugs on patients being treated for heart attacks and strokes. Contact James A. McGowan (919.582.2600).
Durham - MediaSpan Group, Inc. (www.mediaspangroup.com), a provider of pre-press software and Internet new-media programs for newspapers and radio stations, has raised an additional $4.5 million in Series A funding, bringing its total first round investment to $13 million. Participating in the funding were current investors, Southeast Interactive Technology Funds, Covesco-Seteura, LLC and Rustic Canyon Group. The equity financing complements a $5 million term credit facility established with Silicon Valley Bank late last year. In addition, MediaSpan has also acquired California-based First MediaWorks, a provider of online programs and marketing solutions for radio stations. With the acquisition, MediaSpan will work to increase its presence in the radio market. Contact Frank Campagnoni (919.767.2100).
Charlotte - AvidXchange (www.avidxchange.com) received more than $2 million in a deal led by Piedmont Angel Network. Other contributors to the new round of financing included several individuals and members of the AvidXchange management team and board. AvidXchange will use these funds to open regional sales offices and drive implementation of more sales. AvidXchange was launched in 2000 and is a developer of electronic invoicing and purchasing software for the real estate industry. Contact Maura J. Olver (704.943.3878)
Charlotte - Trinity Security (www.trinitysecurity.net) closed on a $1.5 million investment from Venture Capital Solutions of Winston-Salem, according to reports. The investment by VCS will allow the company to expand in the Carolinas through acquisitions and organically. Trinity Security was launched in 2002 and is an integrator of commercial fire, security and communications systems in the Southeast. The firm plans to expand into several new markets across the Southeast. VCS officials said they were attracted to Trinity Security because of its focus on customer service. Contact Peter Wright (704.944.3270).
Raleigh - PotsTek Inc. (www.potstek.com) has raised more than $300,000 in private venture capital during the last quarter. PotsTek is a startup communications technology firm that provides products designed and engineered to bridge the gaps in developing telecommunications network technology. The investment from undisclosed investors will fund the initial product launch of PotsTek's Vplex product, which enables small to medium-sized businesses to consolidate their voice and data traffic onto a common T1 pipe to the public network. PotsTek has now secured one-third of its planned financial investment and expects additional investment over the coming year. Contact William G. Sarine (919.862.9550).
Chapel Hill - UNC Kenan-Flagler Business School's (www.kenan-flagler.unc.edu) MBA student team won the National Venture Capital Investment Competition (VCIC) on April 12, picking up a $10,000 first prize. UNC team members were Ron DiFelice, Lizz Pawlson, Reed Toole, Susie Criscione and Paul Keubler. Other schools in the National Finals were San Diego State University (2nd Place), Harvard (3rd Place), University of Pennsylvania's Wharton School of Business, Columbia, Texas, Duke and UCLA.
VCIC, the nation's premier entrepreneurial strategy competition, was created and hosted annually by the Kenan-Flagler Center for Entrepreneurship and Technology Venturing. During the competition, teams play the role of venture capitalists analyzing real businesses and making investment decisions. Real venture capitalists from around the country judge the competition. UNC's team benefited from numerous tutorial sessions with local venture capital professionals and presentation experts, including Chris Kelly, Reeves McGee, Steve Nelson, Merrill Mason and Heidi Schultz. Contact Jeff Reid (919.962.2031).
the Up
Hemocellular Therapeutics, Inc.
Raleigh, NC
Tens of thousands of people die annually in the United States because of uncontrolled bleeding called hemorrhaging. But Raleigh-based startup Hemocellular Therapeutics, Inc., might have an answer for many patients suffering from excessive bleeding. Hemocellular is working to solve problems with liquid-stored platelets from blood banks, which is the current standard of care. Scientific studies show that liquid-stored platelets are often a source of contamination for patients with compromised immune systems. In addition, liquid-stored platelets can be problematic because they can only be kept in storage for five days.
To combat the problems with liquid-stored platelets, Hemocellular is bringing a human platelet therapeutic to the market that provides immediate hemostasis, is completely sterile, and is freeze-dried for long-term storage. With its a “first to market” position, Hemocellular's technology could present an alternative to help surgeons respond to patients who are hemorrhaging.
Established in June 2002, Hemocellular is an outgrowth of exclusively licensed and patented technology from UNC-Chapel Hill and East Carolina University. The company's innovative approach to limit excessive bleeding is the latest in a long history of discoveries from the Francis Owen Blood Research Laboratory, a world-renown research institution for hematology at UNC-Chapel Hill.
Hemocellular, which has five employees, was an early-stage presenter at CED's Venture 2003 conference in April. Stan Eskridge, the company's president, said Hemocellular is seeking a first-round investment that will help the company complete process science engineering designs, pre-clinical work, an “investigational new drug” (IND), and Phase I clinical trials - all of which would be completed in 18 to 24 months from funding.
“Management's intention is to make this a successful business in order to first, save lives, and second, produce a good return for our investors,” Eskridge said.
Contact Stan Eskridge (919.419.3169).Developments
RTP - Paradigm Genetics (www.paragen.com) has received an additional $8.4 million from the National Institute of Environmental Health Sciences (NIEHS) for research services. The agreement, which is connected to an existing 5-year contract for another $23.8 million, calls for Paradigm to perform research for a publicly accessible database that will contain information on the biological effects of chemicals and other agents. Paradigm focuses on product candidates in agriculture and human health. Contact Melissa Matson (919.425.3000).
RTP - KBI BioPharma Inc., a contract biopharmaceutical manufacturing company, has closed on a $1 million startup loan from the North Carolina Biotechnology Center (www.ncbiotech.org). KBI will use the loan to establish business operations in the state, possibly in northern Durham County. Leslie Alexandre, N.C. Biotech's president and CEO, said KBI had a high-growth potential that would strengthen the state's biomanufacturing industry. KBI, a spin-off from Atlanta-based Kinetic Biosystems Inc., is developing bioreactor technology that is used for growing cells under carefully controlled conditions. The N.C. Biotechnology Center is a private, non-profit corporation established in 1981 by the state's General Assembly to provide long-term economic benefit to North Carolina through support of biotechnology research, development and commercialization statewide. Contact Barry Teater (919.541.9366).
Cary - SAS (www.sas.com) has created a “Life Sciences Organization” within the company to facilitate the exchange of information and intelligence between development and delivery of healthcare. The newly formed organization will be a specialized business unit within the SAS Americas sales division, and it will focus on supporting three primary groups: healthcare providers, health insurers and biomedical firms. The goal of the new organization is to help a wide range of people by ensuring better patient care and financial stability. Contact Bob Chase (919.677.8000).
Durham - Intersouth Partners (www.intersouth.com) has hired W. Chris Hegele as a new part-time venture partner. Hegele will assist in deal sourcing, deal management, due diligence and mentoring of other professionals. Hegele and Intersouth have had extensive co-investment activity and have shared seven common investments including current portfolio companies Pittsboro-based Biolex and RTP-based Trinity Convergence. Hegele is currently a general partner at Kitty Hawk Capital, a Charlotte-based venture capital firm that manages $100 million in four venture capital funds. Contact Andrea Cook (919.493.6640 x108).
RTP - The Council for Entrepreneurial Development (www.cednc.org) hosted its 20th Venture conference April 22 and 23 in Chapel Hill with over 275 attending investors and 852 people participating in total. On hand to review presentations by 24 of the state's most promising private companies, many venture capitalists from across the United States attended the conference for the first time this year, including representatives from Burrill & Co., Versant Ventures, Charles River Ventures, Draper SI Ventures, JMI Equity Partners, Morgan Stanley Venture Partners, and General Catalyst Ventures. The conference also featured an all-star cast of speakers. Eliot Spitzer, New York's Attorney General and the nation's leading crusader for corporate reform, together with Robert Ingram, Vice Chair of Pharmaceuticals and former COO of GlaxoSmithKline, provided keynote remarks. Other speakers included venture capitalist and Fortune columnist Stewart Alsop and Duke University's men's head basketball coach and best-selling author Mike Krzyzewski. Contact Tracy Stutz (919.549.7500 ext 117). www.cednc.org/venture/2003.
your Calendar
Biotech 2003
May 21, 2003
Sheraton Imperial Hotel and Convention Center
RTP, NC
www.cednc.org/biotech/2003
Entrepreneurial Excellence Awards
August 8, 2003
RBC Center
Raleigh, NC
More info on last year's awards: www.cednc.org/awards/2002
For more information, visit the CED Web site (www.cednc.org) or call 919-549-7500.
Venture Update is published by the Council for Entrepreneurial Development (CED) an entrepreneurial support organization located in, N.C.
Lisa Rowe-Ralls, editor
P.O. Box 13353, RTP, NC 27709
Phone: 919-549-7500
FAX: 919-549-7405
Email: news@cednc.org