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 my time,” said Jain, who also noted it would be ideal if the people screening the local deals were “aligned” with other investors.
Moore says he has the kind of contacts with out-of-town venture firms that comes from his 30 years of experience in various aspects of venture capital, technology, and the life sciences. He tells me he came out of General Atomics’ advanced technology group, and was a former managing director (and investment committee member) at HamiltonTech Capital, a San Diego venture firm that no longer exists. He also is the founding chairman of Southern California’s VC Roundtable (now in its 10th year), and led Morrison & Foerster’s venture network in the law firm’s San Diego office.
Moore also has recruited five prominent business and academic leaders for MVP’s board of advisors: Nicholas Binkley, a former Vice Chairman and board member at BankAmerica and a partner and co-founder of the private equity firm Forrest, Binkley & Brown; Dr. David Brenner, UC San Diego’s Vice Chancellor for Health Sciences and Dean of the UCSD School of Medicine; Robert Sullivan, founding dean of UCSD’s Rady School of Management; David Pyke, dean of the School of Business Administration at the University of San Diego; and Duwaine Townsen, a venture partner in the San Diego office of Mesa Verde Venture Partners.
“Our local economy will continue to languish and suffer for some time to come if we can’t bring more capital here,” Moore writes in notes he prepared as highlights about Moore Venture Partners. “Venture capital can play a major role in San Diego’s future successes by commercializing on more of the research and development in the region.
“As the venture capital industry undergoes a restructuring and ‘right sizes,'” Moore says, “my long-term vision is to create a new source of capital, locally and organically, to lead $3 million to $5 million investments in our top tech and life sciences companies.”