UCSD Business School’s Venture Fund Joins Texas Startup’s $16M Deal

3/20/13Follow @bvbigelow

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courses in venture finance and capital management to source venture deals, conduct due diligence, and recommend investments. Any proposed investments by the Rady Venture Fund must be approved by one of two oversight committees comprised of professional VC investors.

“We cannot be the sole investor,” Rasochova says. “There has to be an independent investor to lead the round.” All of the deals the Rady fund has done so far were led by members of the Tech Coast Angels, with the Rady Venture Fund basically participating as an individual angel investor.

“It truly, truly gives the students the opportunity to learn hands-on how it works,” Rasochova says.

The investment in Savara also marks a departure from a vow Rasochova initially made to exclude investments in drug development companies (because of the time and costs involved) when the Rady Venture Fund was established. “To tell you the truth, I first ruled the investment out because of the drug development focus,” Rasochova explains in an e-mail this afternoon. “However, students were able to convince me and the investment committee and [we] received an approval to invest.”

While Rasochova cites several compelling reasons for making the investment, she says the Rady students assessing the deal had unexpectedly deep experience in the field. In particular, she says MBA student George Smith is a pharmaceutical scientist and an expert in respiratory diseases.

“Our students did a deep diligence and modeled various scenarios—at the end they made a convincing argument for an investment and why we should make it,” she writes. “So yes, they are a great company and we believe in their success. A secondary benefit is to provide students with real-world experience in drug development process (given that we are in San Diego), which is very valuable and do it under the reduced timeline, cost and lower risk scenario.”

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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