Versant Continues “Build-To-Buy” With New Fund
This article was originally published in Start Up
Versant Ventures joined the ranks of venture capital firms closing new funds recently, thanks in part to the swell in biotech initial public offerings this year. Versant’s Fund V represents an oversubscribed level of approximately $55 million to its intended $250 million target.
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Born at a time when venture capital found few exit opportunities for early-stage companies, build-to-buy helped mitigate the risk in investing in uncharted science. But the model is flourishing even in this period of wider capital options.
VCs and big pharma execs, speaking at CALBIO, said that even in today’s freer economic climate, investing early in startups, with an option to buy when the time is right, is still a viable business strategy.
Versant is betting a sizable amount of its portfolio on drug assets, instead of full-blown companies, with single buyers holding options to acquire each one.