Genesis Innovation Group, a Holland, MI-based collective of venture investors focused on early-stage medical device startups, is raising a new $10 million fund called Cultivate(MD) Capital Fund I.
Genesis is not the typical venture capital firm. In an interview earlier this year, CEO Rob Ball said it’s a consulting group consisting of accredited private investors with deep experience in the medical device space that also invests in their client companies.
The purpose of Cultivate(MD), Ball says, is to invest in later-stage medical device companies, particularly in orthopedics. Because the new fund is a private placement, it will be open to a limited number of accredited investors already in the Genesis network instead of the public at large. Genesis will partner with Cultivate(MD) to deploy its team and network, Ball says, with the overall goal of lowering the cost of healthcare while improving service to patients.
“We realized that Genesis Innovation Group is particularly focused on very-early-stage companies,” Ball explains. “As we’ve been successful in developing opportunities, the need for capital was there and there was lots of interest in our network to engage further.”
Although the new fund is looking to invest in companies across the country, there is a need for more later-stage capital in Michigan. The state’s VC community has grown exponentially in the past decade, but there are still funding gaps. According to the Michigan Venture Capital Association’s most recent annual report, there is a shortfall in follow-on capital for existing portfolio companies in Michigan, and 44 percent of the MVCA’s members currently raising funds said they felt “less than confident” that they could raise the money solely from Michiganders.
Cultivate(MD)’s medical director, University of Michigan alum R. Sean Churchill, is an inventor himself. The orthopedic surgeon, who lives near Milwaukee, WI, has been involved in “developing a number of shoulder replacement and extremity fixation devices,” Ball says.
The new fund has already made its first investment, soon to be formally announced, in Shoulder Innovations, a Genesis portfolio company that makes implantable shoulder replacement systems. Ball declined to disclose the amount of the investment.
