The evaporation of much of San Diego’s hometown venture capital base has prompted the city’s technology community to organize a business task force to find new ways of getting startup capital to early stage companies.
Creating the task force is part of a broad initiative that Connect, a local non-profit organization for technology and entrepreneurship, has undertaken to boost support for San Diego’s innovation economy—as well as its political clout in Washington D.C. Connect CEO Duane Roth, who outlined the initiative in August, says Connect chairman and local biotech legend David Hale spearheaded the formation of the task force, and recruited David Titus of Windward Ventures, a San Diego VC firm, to lead the effort.
Roth says Titus has recruited task force members from San Diego’s technology industry associations “to try to get our convergence act together.” The list includes representatives from Biocom, CommNexus, Cleantech San Diego, the San Diego Venture Group, San Diego Software Industry Council, and the San Diego Regional Economic Development Corporation.
Altogether, about 15 people are on the task force, “including people who are just interested in solving this problem,” says Titus. “The idea is to come up with a plan to increase the access to capital for the early stage companies here.”
Even before last year’s collapse on Wall Street, it had become clear that a number of San Diego’s most prominent hometown venture capital firms were dramatically scaling back their operations and were making no significant new investments. The list includes Enterprise Partners Venture Capital, Forward Ventures, and Titus’ firm, Windward Ventures.
Titus says Windward raised its last venture fund in 2000, and the firm made its last new investment from that fund in 2007. Since then, Titus says, “We’re managing our [existing] portfolio of companies—like many others.” And for at least the past two years, Windward has been unable to raise a new fund from pension funds, college endowments, and other institutional investors. As Titus put it, “The meltdown in the public equity markets and the global economy has really shut that door tight.”
The situation, which was only compounded by the credit crisis that began last year, has created a void in funding for San Diego’s early stage startups that was not immediately apparent—largely because
