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This article was prepared for the January 15, 2003 edition of U.S. 1 Newspaper. All rights reserved.

Venture Funds

Cardinal Partners, 221 Nassau Street, Third Floor,

Princeton 08542. John K. Clarke, managing general partner. 609-924-6452;

fax, 609-683-0174. Home page: www.cardinalpartners.com

Cardinal Partners is an early-stage venture capital firm with $185

million under management. It invests between $6 and $8 million per

company, and focuses on high growth companies in the information technology,

life sciences, healthcare services, and medical devices sectors.

In the healthcare information technology sector, Cardinal seeks investments

that streamline communication between providers, payers, and patients,

further the R&D goals of the pharmaceutical industry, or automate

the workflow and productivity of healthcare providers. Active in the

life sciences sectors since the 1980s, the firm pursues companies

that can offer alliances with large pharma, the potential for broad

clinical application, and command of multiple technologies bearing

on a specific large-market opportunity. It is particularly interested

in innovations being made in the area of drug delivery.

In healthcare services Cardinal supports businesses that optimize

service in traditional settings or empower physicians to make informed

cost/benefit evaluations.

Care Capital LLC, 47 Hulfish Street, Suite 310,

Princeton 08540. Jan Leschly, chairman/CEO. 609-683-8300; fax, 609-683-5787.

Www.carecapital.com

Care Capital makes investments of between $5 million and $10 million

in later state private and public companies. It invests in life science

companies with a particular focus on pharmaceuticals, biotechnology,

and information technology and service companies serving the life

science industry.

In addition to providing growth capital, the fund seeks to work alongside

management to acquire businesses that are for sale by private or public

owners. It also assists corporate partners who may wish to acquire

or divest businesses to accomplish financial reporting, capital allocation,

or other objectives.

Epigenesis Pharmaceuticals, at Cedar Brook Corporate Center, is the

only Central Jersey firm in the portfolio. Other portfolio companies

include Anadys Pharmaceuticals, Archemix Corp., D-Pharm Ltd., Dynavax

Technologies, Medical Present Value, Microchips, Nitromed, PHT Corp.,

and Renovo Limited.

Domain Associates LLC, 1 Palmer Square East, Suite

515, Princeton 08542. James C. Blair, general partner. 609-683-5656;

fax, 609-683-9789. E-mail: domain@domainvc.com Home page: www.domainvc.com

Domain Associates, with approximately $492 million under management,

concentrates its investments in biopharmaceuticals, drug discovery

services, medical devices, instrumentation, diagnostics, advanced

materials, healthcare information systems, and healthcare services.

In biopharmaceuticals it looks for a large, poorly met clinical need,

a proprietary technology platform, and early evidence of efficacy.

In healthcare services, it looks for a proven management team that

is first to enter a given market and a robust strategy and business

model.

Domain has two business approaches, accelerated commercialization

strategy and defined liquidity ventures. The first involves adding

highly relevant products and/or commercial capabilities to a high-tech

R&D-stage enterprise, thereby mitigating risk while simultaneously

providing infrastructure that the company will require in the future.

The second involves structuring new companies from the outset in ways

that would make them attractive acquisition candidates and, when possible,

to identify the purchases and even negotiate specific acquisitions

simultaneous with (or soon following) initial investment.

Early Stage Enterprises LP, 995 Route 518, Skillman

08558. Ron Hahn/Jim Millar, general managers. 609-921-8896; fax, 609-921-8703.

E-mail: ron@esevc.com, jim@esevc.com Home page: www.esevc.com

Early Stage Enterprises is a private venture capital fund organized

to provide capital and guidance to early stage companies in the Mid-Atlantic

region. ESE has $44 million to invest, and is licenses by the U.S.

Small Business Administration as a Small Business Investment Company.

It would founded in 1996 to address what its founders, Ron Hahn and

James Millar, saw as an under-served segment of the private equity

market. In recent years, companies requiring less than $2 million

of capital have encountered increasing difficulty in securing financing

as trends in the venture capital industry have shifted towards an

emphasis on larger and later stage developments. ESE welcomes proposals

from these companies, and will consider investing as little as $250,000

in companies that have exceptional growth potential. ESE works closely

with the management of the companies in which it invests.

The fund specializes in providing the first institutional money invested

in an early stage company. In most cases, prospective companies have

less than $3 million in annual revenue at the time of ESE’s first

investment. All capital invested by ESE is in the form of equity,

but the investment is not intended to create a controlling interest.

ESE focuses on early stage businesses in the information technology,

computer software, Internet software and services, medical devices

and diagnostics, life sciences, and healthcare services sectors. It

prefers to work with companies in the Mid-Atlantic region, from Connecticut

to Virginia. Its preferred first round investment ranges from $500,000

to $1 million. Additional funding, up to $2.5 million total, is usually

keyed to clearly defined milestones in a company’s progress, such

as a product test or a target level of sales.

Edison Venture Fund, 1009 Lenox Drive, Building

4, Suite 200, Lawrenceville 08648. John H. Martinson, Ross Martinson,

and Joe Allegra, general partners. 609-896-1900; fax, 609-896-0066.

E-mail: info@edisonventure.com Home page: www.edisonventure.com

Edison invests in expansion stage ($5 to $20 million revenue) information

technology companies located in the New York City to Virginia corridor.

It invests $3 to $5 million initially and is usually the sole or lead

investor.

The fund seeks companies that have the capabilities to lead emerging

markets. It identifies promising enterprises that will grow rapidly

with proprietary products or services. With $400 million currently

under management, Edison has created market capitalization surpassing

$5 billion. Its strategies include venture capital, expansion financing,

management buyouts, consolidations, and secondary stock purchases.

The fund has invested in 10 companies providing software and services

for major pharmaceutical and biotechnology companies.

Edison develops close working relationships with entrepreneurs and

becomes their primary business advisor. It assists portfolio companies

in strategic planning, organizational development, and capital structure.

The fund welcomes investment proposals directly from entrepreneurs,

investors, professional service providers, and other referral sources.

It generally makes investment decisions within two months — and

less when the business plan is comprehensive and it already has considerable

industry knowledge.

Healthcare Ventures LLC, 44 Nassau Street, Suite

200, Princeton 08542. James H. Cavanaugh, president, general partner.

609-430-3900; fax, 609-430-9525. Home page: www.hcven.com

One of the world’s largest venture capital firms specializing in health

care, Healthcare Ventures (HCV) invests in emerging growth companies

with the potential for exceptional growth. Since its formation, HCV

has created biopharmaceutical companies in genetic therapy, genomic

sciences, drug discovery and delivery, neuroscience, and organ and

cellular transplantation.

HVC, with approximately $535 million under management, makes initial

investments of $1 to $20 million in companies with a potential for

liquidity in 3-5 years at a value of $100 million with markets in

excess of $500 million worldwide.

Johnston Associates Inc., 181 Cherry Valley Road,

Princeton 08540-7645. Robert F. Johnston, president. 609-924-3131;

fax, 609-683-7524. E-mail: jaincorp@aol.com Www.johnstonassocinc.com

Johnston Associates (JAI), founded in 1968, has launched companies

from the ground up around unique and commercially promising technologies

and has also financed more established small companies with demonstrated

growth potential. Its portfolio of companies range from pharmaceuticals,

diagnostics, cell separations and imaging to drug discovery and delivery,

toxic waste remediation, genetic engineering and biopesticides. Some

of these companies are in the early stages of development, while others

have emerged as publicly traded companies.

JAI provides seed funding and assists on an on-going basis raising

money through private investors, financial and technical alliances

with large corporations, and strong relationships with lead underwriters.

JAI invests its own private capital and does not manage an investment

fund. Because of the time-consuming nature of start-ups, JAI typically

invests in one enterprise a year. Its investments have ranged from

$300,000 to over $3,000,000. Stringent criteria are applied to scientific

achievement, market potential, uniqueness of approach, and caliber

of co-founders.

The firm’s current main areas of interest are therapeutics and delivery

mechanisms, separations and purification technologies, databases for

therapeutic discovery, drugs from Europe, and drugs to be repositioned.

New Jersey Technology Council Venture Fund, 1001

Briggs Road, Suite 280, Mount Laurel 08054. Jim Gunton, Joe Falkenstein,

and Robert Chefitz, general partners. 856-787-9700; fax, 856-787-9800.

Home page: www.NJTC.org

The NJTC Venture Fund invests from $300,000 to $3 million in high-tech

growth private companies in the seed, start-up and early stages (concept

to $5 million in revenues). It seeks focused businesses with the potential

to dominate a promising market niche. Capital comes from corporations,

public and private funds, partnerships and individuals. The fund has

commitments of close to $30 million, which will be leveraged with

a $10 million NJEDA investment from state appropriations (www.njtcvc.com).

The NJTC fund seeks opportunities where its skills, experience and

contacts will contribute meaningfully to a company’s success. It generally

holds a seat on the board of directors of portfolio companies and

serves as a counselor on strategic or otherwise major decisions.

Jumpstart New Jersey is a new NJTC initiative. Founded in September,

2002, in response to the fact that access to capital remains a critical

need for high tech companies, it is an investor-driven group that

offers members the opportunity to realize profits while helping to

develop new ventures through mentoring.

Penny Lane Partners LP, 1 Palmer Square, Suite

309, Princeton 08542. Stephen Shaffer, partner. 609-497-4646; fax,

609-497-0611. E-mail: pennylanepartner@msn.com Home page:www.trautmanwasserman.net/pennylane.htm

Established in 1996 as a Small Business Investment Company (SBIC),

Penny Lane Partners, with approximately $30 million under management,

is licensed and regulated by the Small Business Administration (SBA),

but remains a privately-organized and privately-run investment firm.

With its own capital and with funds borrowed at favorable rates from

the federal government, Penny Lane participates in partnerships between

the government and the private sector, providing capital to small

independent businesses, both new and already established.

ProQuest Investments, 600 Alexander Park, Suite

204, Princeton 08540. Pasquale DeAngelis, chief financial officer.

609-919-3560; fax, 609-919-3570. E-mail: allisonf@proquestvc.com

Home page: www.proquestvc.com

ProQuest Investments, founded in 1998, is a healthcare venture capital

firm with over $250 million under management. It invests in healthcare

companies seeking seed to late-stage financing. Its portfolio included

companies in the biopharmaceutical, enabling technology, medical device,

and healthcare service sectors. ProQuest has a special expertise in

oncology.

Average investments range from $250,000 to $10 million. The firm looks

for breakthrough technologies and products with strong intellectual

property. ProQuest focuses on opportunities in initial addressable

markets of at least $200 million where there is a significant unmet

need for the company’s products and technology.

Sycamore Ventures, 845 Alexander Road, U.S. Trust

Building, Princeton 08540. Peter Gerry, managing director. 609-759-8888;

fax, 609-759-8900. E-mail: tinas@sycamorevc.com Home page: www.sycamorevc.com

Spun out of Citicorp Venture Capital in 1995, Sycamore managed more

than $550 million. Its typical investment ranges from $5 million to

$15 million, distributed over several rounds of financing as a company

achieves key milestones. John Whitman, the spouse of former Governor

Christie Whitman, is among the general partners here.

Sycamore has long-standing relationships with corporations, entrepreneurs,

and business leaders in the Asia-Pacific region. A specialty is helping

a product company to expand markets in China and Japan.

TMF: Technology Management & Funding LP, 100 Overlook

Center, Suite 102, Princeton 08540. Harry Brener, chairman. 609-921-2001;

fax, 609-497-0998. Home page: www.tmflp.com

Technology Management and Funding (TMF) was founded in 1990 to uncover

and introduce breakthrough technologies, while providing commercialization

and funding solutions that foster accelerated growth for early-stage

technology companies. It moved from Research Park to Princeton Overlook

earlier this month.

There are very few conventional funding sources available for early-stage

companies. This significant void in funding prompted TMF to develop

an alternative method to the conventional routes for bringing technologies

to the marketplace, building companies, and obtaining funds.

TMF establishes relationships between early-stage technology companies

and major corporations that can involve, among other things, a joint

venture, a licensing agreement, or a development contract for a defined

market sector. The process allows the early-stage technology company

to obtain market access, credibility, and funding without losing control

of the company. The corporation, in turn, receives access to a pre-screened

and proven technology, a competitive advantage, lowered risk, and

increased market share.

TMF reviews in excess of 1,000 technologies annually. Its portfolio

companies are concentrated in software, electronics, electronics,

industrial components, environmental technology, telecommunications,

and biotechnology.

Whitestone Capital LLC, 47 Hulfish Street, Suite

505-C, Princeton 08542. James R. Utaski, partner. 609-806-0002; fax,

609-806-0004. Www.whitestonecapital.com

Whitestone Capital funds companies that will benefit from investment

concurrent with board member addition.


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