How Health IT Firms Can Open VC Vault at OpenView Venture Partners

12/8/10

Boston-based OpenView Venture Partners has become more active in backing companies in the healthcare IT arena over the past several months, announcing two significant investments since September. Because this sector is so hungry for capital to fund new ideas, I thought it would make sense to chat with OpenView partner George Roberts about what it takes for health IT companies to raise dollars from his firm.

It should come as good news to health IT entrepreneurs that OpenView is interested in investing in their industry. The venture firm, founded in 2006, goes way beyond writing checks for its portfolio companies. When needed, the firm also helps the companies it funds create marketing strategies, optimize plans for their potential exits, and recruit executives. All this would seem shallow if the firm didn’t have people like Roberts, who helped build Oracle (NASDAQ:ORCL) into one of the most profitable technology companies in the world during his years as a senior executive of the Redwood City, CA-based firm.

Roberts, who ended his 13-year tenure at Oracle in 2003 and joined OpenView in April 2007, doesn’t seem to get caught up in the latest technology fads. There’s more below about what he is looking for from potential portfolio companies. And the proud Wisconsinite is definitely not the VC you want to hit up for money if your business plan resides on a bar napkin. (Read on for his comment about how his firm would have approached Mark Zuckerberg during the Facebook CEO’s Harvard dorm days).

However, OpenView has plenty of money for new investments, Roberts says. In the Q&A that follows, I tried to solicit information and tips from the VC that any health IT entrepreneur might want to know when considering whether to pitch the firm.

Xconomy: What is OpenView looking for while considering investments in health IT firms?

George Roberts: What we’re looking for are what we call expansion-stage companies in the health IT space. That includes companies with $2 million a year in revenue and up to $20 million in annual revenue. We also look for companies that are growing by 100 percent a year to 30 percent a year depending on their size and stage. These are companies that operate in large markets and have an opportunity to get to at least $100 million in revenues. Our belief is that companies that can get to that size, and that can get reasonable market share in their space, can command much better exits or an opportunity to go public.

X: What is OpenView not looking for health IT companies?

GR: We’re looking across the … Next Page »

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