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Ebb & Flow

Skyline Ventures capitalized on a string of acquisitions of portfolio companies and IPO exits over the last few years by raising a fifth fund of $350 million in only four months, almost doubling its funds under management to $800 million.

Skyline IV was $200 million. This time around the firm went for a larger fund to make more sizeable investments in a company, Managing Director John Freund told Ebb & Flow.

"In the last fund we would have loved to be larger investors, but we didn't believe that was prudent given the size of the fund," he said. With Skyline IV, the firm invested about $15 million over the life of each investment; with Skyline V, it's planning to invest $15-$35 million per company.

"We always invested all the way through," noted Freund, "but we reserved a lot if it was an early stage company and less if it was a later stage company." The larger fund will enable Skyline to make a bigger early investment, he said.

The firm also slightly bumped up the number of planned investments, to 15 from 13 in Skyline IV. It invests in both medical device and therapeutics companies.

Freund said all the major existing LPs from Skyline IV reupped, bringing with them new investors. All of the new LPs were referred by existing investors. "We've grown by word of mouth, which in our view is the nicest way to do it," he said.

The LPs include endowments, funds of funds and family offices.

Skyline has already made its first investment from the fund, in RNA interference company Dicerna, which raised $13 million in a series A round last week. Skyline led the round with Oxford Bioscience Partners. Oxford's Doug Fambrough will serve as chairman, and Skyline's Stephen Hoffman will join the board (see B27).

Making an exit

Exits from Skyline's previous funds include IPOs for metabolic play Sirtris (SIRT), inhaled drug delivery company Map (MAPP) and infectious disease company Targanta (TARG) - all this year.

On the takeout side, protein therapeutics company Avidia was acquired by Amgen (AMGN) for $290 million in cash in October 2006. Two other Skyline companies

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