San Diego’s Moore Venture Partners Seeks a Niche Amid Local VC Decline

8/2/11Follow @bvbigelow

Can a small venture firm make much of a difference in stemming the general decline that has marked venture capital funding in San Diego’s innovation economy over the past five or six years?

A one-person firm created last year may not exactly fill the void in San Diego, but founder Terry Moore argues that he can make a difference in helping what he contends is an underserved startup community in San Diego and Southern California. He intends to ultimately raise between $10 million to $15 million for the inaugural fund at his new firm, Moore Venture Partners (MVP), which he describes as a traditional VC fund that plans to invest alongside top-tier VC firms in both tech and life science companies throughout this region.

Moore tells me he already has raised part of the total for his inaugural fund (an amount he declined to disclose), and MVP has made two investments in local startups.

Last month, Moore’s firm joined in a $15 million Series C round of equity funding in Daylight Solutions, the San Diego startup developing semiconductor-based infrared laser technology. At the time, the company said the defense contractor Northrop Grumman led the round, which was joined by other investors that were not identified. MVP also participated in a $26.5 million Series B financing for San Diego-based Astute Medical that was co-led by Domain Associates and Delphi Ventures in May, 2010.

Moore says both deals exemplify the type of investments he plans to make in a total of eight to 10 startups that embody a diverse range of early, growth, and expansion-stage companies in San Diego and Southern California. “The idea is not to lead or seed,” Moore says, describing MVP’s role as a co-investor that’s focused on sourcing, qualifying, and doing due diligence on local venture deals.

In raising MVP’s initial fund, Moore says he’s targeting a mix of accredited, “high-net worth” individual investors, foundations, family investment portfolios, hedge funds, and corporate venture capital. The top VC funds that MVP partners with are not open to individual investors, Moore says, but MVP is available to individual investors who are seeking the kind of investment returns that top venture funds yield.

The role that Moore hopes to carve out for MVP in local deals would seem to fill a void in San Diego’s startup community that was recently identified for me by a Northern California VC partner, Sumeet Jain of San Francisco’s CMEA Capital. Jain  said San Diego’s innovation community needs a way of “curating” its local deals and entrepreneurs for out-of-town venture investors. “Screening companies is not a good use of … Next Page »

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow

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