BEACHWOOD, Ohio — An under-the-radar investment fund hopes to make two to three deals in the life sciences sector this year and focus its efforts on Northeast Ohio startups.
Portal Capital, which started early last year, closed one deal last week: an undisclosed sum in Clinical Outcome Management Solutions, a Cuyahoga Falls, Ohio, company that provides clinical tools for longterm-care facilities. It funded one company in 2008: LuxAir, a Beachwood, Ohio, business that makes germ-killing accessories that attach to ceiling fans.
Dr. John Zak, a partner at Capital, which is also based in Beachwood, wouldn’t discuss the fund’s size. But he says the firm initially invests between $250,000 to $2 million in early stage companies, with a total transaction value of $10 million. In most deals, Zak and his parthers expect to have at a least majority stake in the companies.
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The firm’s focus is on medical devices and equipment companies. The additional two to three deals Zak hopes for this year don’t include the Clinical Outcomes investment.
“We’re not on most people’s radar screen,” said Zak, a former surgeon who lead the health care division of Carleton Advisors.
It’s been mostly bad news for investing recently. Venture fund-raising was down 21 percent in 2008, according to a report from Thompson Reuters and the National Venture Capital Association. The same report predicted a slower fund-raising pace this year as well.
Zak said Portal doesn’t have the same constraints as most funds. He said its backers are a small collection of “high net-worth individuals from Northeast Ohio.” The company was started last year by managing partner Bill Kilroy, chief executive of the Kilroy Co. and a charter member of the North Coast Angel Fund.
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“Too often good technologies and ideas and innovations are born here at the universities or centers of excellence,” Zak said. “So often after inception, they take flight to the coasts or some biotech mecca. We hope there’s an opportunity to have them stick around.”
