Ex-Pharmacia Staff Venture Fund
The bank has rounded up eight members of its national network of venture capital funds to create a multi-million dollar pool of capital for former Pharmacia scientists and executives who may not be retained by Pfizer but may have the drive to start their own bioscience companies here.
The National City Life Science Fund Network is part of Southwest Michigan First’s campaign to retain Kalamazoo County’s pharmaceutical talent as Pfizer absorbs Pharmacia. It’s estimated that some 1,500 to 1,600 research and development workers in Kalamazoo County could be displaced during the company’s reorganization.
The venture capital partners that stepped forward specialize in funding the life sciences and technology and collectively have $1.6 billion under management.
Tim Lathe, president and CEO of National City Bank of Michigan/Illinois, said the bank recognized the “tremendous” community assets of intellectual property and intellectual capital represented by the “new” Pfizer.
“If those folks were to leave the community en masse it would be devastating,” he said. “We’re not only a big business part of the community, but we employ 2,000 people directly in the Kalamazoo market and many more across the state. That loss would impact us personally, as well as professionally.”
Institutionally, National City has been one of the longest-term investors in venture capital funds of any bank in the country, having been at it for more than 20 years, Lathe said. The bank has invested more than a half billion dollars in dozens of venture funds, a subset of which specialize in life sciences and technology.
Lathe said the plan unfolded rapidly during discussions with Barry Broome, director of Southwest Michigan First, the economic development engine for the state’s southwest region. Lathe is a director on the Southwest Michigan First board.
“We said, ‘Why don’t we call those folks and tell them there’s a very real opportunity to make immediate connections here with very real people with very real products and processes. Let’s see if we can make a match.’ Day in and day out these people scour the country for these types of opportunities.”
The response was overwhelmingly positive, Lathe said. The bank contacted eight funds and the partners of every one of them jumped at the opportunity.
The funds include EDF Ventures of Ann Arbor; Foundation Medical Partners of Rowayton, Conn.; Blue Chip Ventures of Cincinnati; Primus Ventures and Early Stage Ventures, both of Cleveland; Draper Triangle Ventures and Birchmere Ventures, both of Pittsburgh; and Arch Development Partners of Chicago.
National City is using Southwest Michigan First as a conduit in the match making effort.
Entrepreneurial-minded scientists had a chance to discuss their ideas with representatives of all eight venture capital funds at the Venture Capital Marketplace conference hosted by Southwest Michigan First on Tuesday and Wednesday last week.
Lathe said some of the very small startups might take only a couple million dollars to launch, while others will take tens of millions of dollars. There’s one very large one that could require close to $100 million to launch, he said.“Those kind of dollars are available,” he said. “The business plans and the configuration of capital going into these companies is going to take all kinds of different forms. I anticipate we will play (a part) in any number of those forms as these companies come together.”