It may be a lousy time for raising money for venture capital funds, but that isn’t deterring medtech entrepreneur Steven Tallarida from launching Makaira Venture Partners near Boston. Though his earlier strategy to finance a medtech fund fell short, Tallarida and his associates plan to hit the road in the coming months to raise about $50 million for a maiden fund that will make investments in medical devices startups, Ronald Murphy, a principal at the firm, says.
PE Hub was first to report the formation of Makaira late last week, and I wrote this story back in late 2007 about Tallarida’s earlier plans to raise money for a medtech fund.
Tallarida, CEO of medtech manufacturing and product development firm STD Med in Stoughton, MA, will be a general partner at Makaira. He and STD Med have over the past decade incubated and launched several Massachusetts medical devices startups—including Angiolink, Spirus Medical, Arthrosurface, and Cardiosolutions. Makaira will get a first and early look at deal opportunities from STD Med while operating as an independent firm, according to Murphy. (By the way: STD Med is abbreviated from the original company name, Stoughton Tool & Die).
Murphy, who is also vice president of investor relations at STD Med, says that STD will save Makaira’s portfolio startups money by providing them with product development and initial manufacturing services. Those perks have already drawn founders of previous STD-incubated startups, he says, and will be a selling point to potential limited partners in Makaira’s proposed fund.
“We kind of offer a one-stop shop for somebody that looks to commercialize a medical device technology,” says Murphy, a former investment banker at Merrill Lynch and UBS, among other firms. “A good thing about Makaira is we’ll be able to see those technologies… a lot earlier than the typical VC firm.”
The other member of the initial Makaira team is Mike Benoit, a member of Massachusetts angel investment group Bay Angels, who has joined the new firm as managing partner. Benoit sold his IT services firm Vista High Tech Resources for an undisclosed sum to Data Processing Resources (now Compuware) in the late 1990s. He has since backed STD Med-launched startups such as Angiolink, a developer of a stapling device to close holes in arterial tissue, which was acquired by Minneapolis-based medical devices firm Medtronic (NYSE:[[ticker:MDT]]).
This is an another try at raising a fund for Tallarida, who will remain CEO of STD Med. He tried to raise funds previously through the sale of a minority stake in STD Med to private equity firms. Murphy says that didn’t work out because the PE firms that were pitched the idea wanted an exit scenario, and Tallarida has no plans to sell the 56-year-old company.
Makaira, which is housed at STD Med, is expected to begin making its pitch to limited partners such as pension funds, family offices, and wealthy individuals after the first quarter, Murphy says. The plan is wrap up the fundraising effort within six months. Murphy notes that Tallarida is putting some of this own money into the fund, and he will encourage many of the previous angel investors in STD-launched companies to do the same.
