The Partners Innovation Fund, created in 2007 by Brigham and Women’s Hospital and Massachusetts General Hospital, addresses an unmet need for funding emerging technology in the capital gap.
The primary objective of the Fund is to accelerate to market technologies developed by Partners HealthCare investigators, thereby improving health care quality, cost and outcomes. Structured as a separate LLC entity, the $35M Fund is designed to be evergreen with all gains from investments recycling back into the fund to create capital for additional investments. Investment decision oversight is provided by an independent external committee composed of experts from industry, venture capital and academia.
The Fund operates on a classic venture capital model whereby opportunities are rigorously evaluated on the basis of technical merit, market strength and business model all within an overall commercialization scenario.
The Fund has four major goals:
- Capture more value from the Partners HealthCare research portfolio.
- Bridge the capital gap between discovery and clinical trials.
- Attract external capital by demonstrating institutional commitment.
- Generate a return on investment to refresh capital for additional technology investments.
Gap Funding
Due to changes in the investment environment, there is a dearth of funding support for translational research between discovery and proof of concept. By focusing on this capital gap, the Fund can advance projects of high commercial potential to a stage where more traditional investment sources are attracted to underwrite the risk.
Types of Fund Investments
The Partners Innovation Fund will make two types of investments: Equity and Development.
Equity investments include seed and early financing that will catalyze company formation and attract institutional investors
Development investments precede company formation and are intended to validate technologies with a high potential for later commercialization by either new venture formation or out-licensing to an existing market player. For all investments, funds will be reserved for participation in follow-on financing.
Innovation Fund Process
Utilizing a proven venture capital based diligence model, the team conducts in-depth diligence on all opportunities in two steps:
1. Initial Screening: Assesses opportunities for high commercial potential. Key project attributes are:
- Product concept and value proposition
- Intellectual Property Position
- Stage of technology development
- Market Opportunity
- Technology Review
- Management Team
- Regulatory pathway
- Funding requirements
- Competitive Analysis
- Business Model
2. Evaluation and Investment Decision: During this step, PIF staff conducts extensive diligence to assess the strength of the proposed business in relation to our investment criteria. This process takes place over 3 to 6 months during which time we interact with technical and market experts, possible customers, competitors and potential co-investors as we prepare for presentation of the investment opportunity to our external Investment Committee for final approval.
The team will work with investigators and their advisors to develop a project or business plan including connections to potential entrepreneurs, advisors and investors in the venture, private or corporate arena.