Avalon’s Kinsella Says San Diego, Like Any Robust Startup Ecosystem, Needs Local VCs

than 75 startups. He was the founding chairman of Aurora Biosciences, which was started in 1995 and was acquired by Cambridge, MA-based Vertex Pharmaceuticals in 2001 for $592 million. He also invested in Illumina (NASDAQ: [[ticker:ILMN]]), Onyx Pharmaceuticals (NASDAQ: [[ticker:ONXX]]), Sequana Therapeutics (now part of Celera Genomics), and Pharmacopeia, (acquired by Ligand Pharmaceuticals). Among his latest deals are investments in Avelas, which Luke recently profiled, AnaptysBio, Amira, InCode, and Sirion.

Yet Kinsella’s star wasn’t always shining so brightly. His first fund was just $400,000, raised in 1983 from two friends, and he basically labored alone for years in the vineyards of life sciences venture capital as he slowly gained credibility and recognition. For many of the past 25 years, in fact, the two biggest players in San Diego’s life sciences venture community were Enterprise Partners Venture Capital and Forward Ventures. Yet neither firm has raised a new fund in years, and both have significantly curtailed their operations—along with several other homegrown VCs.

So how does Kinsella view the situation?

“I think it’s inarguable fact that there are a number of venture funds that are just not continuing in town, although I don’t want to necessarily say who they are,” Kinsella says, in deference to the sensitivities of his fellow San Diego VCs. “There’s a certain diminution of investable capital through various fronts here.”

But is it important to San Diego’s startup community to have homegrown VCs?

“I think it is, because a proper ecosystem that is fertile for startup companies requires local venture capital. I frankly can’t think of an example of a robust, startup-friendly ecosystem anywhere else in the country, let alone the world, where they don’t have a significant contingent of local venture funds.”

Kinsella says the evaporation of local venture capital, however, has not been a significant issue for Avalon Ventures. “From our standpoint, we are pretty autarchic at the early stages, meaning we don’t really feel the need for validation from our confreres in the

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Author: Bruce V. Bigelow

In Memoriam: Our dear friend Bruce V. Bigelow passed away on June 29, 2018. He was the editor of Xconomy San Diego from 2008 to 2018. Read more about his life and work here. Bruce Bigelow joined Xconomy from the business desk of the San Diego Union-Tribune. He was a member of the team of reporters who were awarded the 2006 Pulitzer Prize in National Reporting for uncovering bribes paid to San Diego Republican Rep. Randy “Duke” Cunningham in exchange for special legislation earmarks. He also shared a 2006 award for enterprise reporting from the Society of Business Editors and Writers for “In Harm’s Way,” an article about the extraordinary casualty rate among employees working in Iraq for San Diego’s Titan Corp. He has written extensively about the 2002 corporate accounting scandal at software goliath Peregrine Systems. He also was a Gerald Loeb Award finalist and National Headline Award winner for “The Toymaker,” a 14-part chronicle of a San Diego start-up company. He takes special satisfaction, though, that the series was included in the library for nonfiction narrative journalism at the Nieman Foundation for Journalism at Harvard University. Bigelow graduated from U.C. Berkeley in 1977 with a degree in English Literature and from the Columbia University Graduate School of Journalism in 1979. Before joining the Union-Tribune in 1990, he worked for the Associated Press in Los Angeles and The Kansas City Times.