A Holland-based venture capital firm closed last week on $7.2 million of the $10 million it seeks to raise to invest in health care startups.
Formed last fall by Genesis Innovation Group LLC, a developer of emerging medical device technologies, cultivate(MD) Capital Fund GP LLC netted investments from about 50 individual investors. Many investors are individuals who invested previously in startups spun out of Genesis Innovation Group, said Robert Ball, CEO of Genesis and managing director of cultivate(MD).
The fund continues to seek additional investors through 2018 toward the $10 million goal and could make its first investment in a startup company within a couple of months.
“That cash is in the bank and we are actively performing diligence on a couple deals,” Ball said. “We are just beginning to ramp up our deal-flow process.”
Cultivate(MD) targets early-stage health care companies with a focus on medical devices, particularly orthopedics. The fund will put up to $1 million into a startup across multiple capital rounds, Ball said.
Beyond the capital investment, cultivate(MD) can bring to a startup a network of professionals at Genesis Innovation Group who have deep experience in the medical device sector, collectively hold more than 200 patents, and can help to steer the company in the right direction, Ball said.
Prime candidates for an investment are startups that “have a proven technical solution to a well-understood problem and where they can either bring a strong management team or we can leverage the team at Genesis to help drive the company to success,” Ball said
“Health care continues to be a dynamic space, and inventors and entrepreneurs face significant risk during their development stages,” he said. “Innovators need a network of intellectual capital that will help convert their ideas and assumptions into marketable innovations. Genesis provides a nurturing environment for these health care inventors and their innovations.”
Genesis Innovation Group presently has five companies within its portfolio and has a “couple more in the works,” Ball said. Existing portfolio companies include Magnesium Development Co., Shoulder Innovations Inc., and iMAGEN Orthopedics LLC, each based in Holland.
Magnesium Development Co. is developing surgical screws for orthopedic procedures to replace a torn ACL in knees. Using an alloy material that’s found in daily vitamins and developed by Livonia-based Nano Mag LLC, the screws are designed to gradually dissolve and absorb into the body.
Shoulder Innovations developed a shoulder-replacement implant that costs less, offers greater stability and lasts longer than existing implants, enabling a patient to perhaps avoid subsequent replacement surgery years later.
iMAGEN Orthopedics, formed in March 2017, is developing a total knee replacement product that Ball said is facilitated by a pre-operative planning process using medical imaging data to virtually plan the procedure. 3-D imaging allows an orthopedic surgeon to refine the size of components used in a procedure and their positioning to “make it a potentially more effective and faster procedure,” he said.