Ebb & Flow

In its previous fundraising efforts, Sofinnova Ventures typically would take a year or more to raise a fund that wasn't oversubscribed. Thus, the firm was pleasantly surprised when its $375 million Sofinnova Venture Partners VII fund closed in eight weeks - and was two times oversubscribed.

The quick turnaround, according to Sofinnova's Mike Powell, suggests two trends. First, he said, "this is a good environment for raising money." Also, Powell thinks the firm now is viewed by LPs as "people who made it, rather than people trying to get there."

Sofinnova Venture Partners VII will invest in about 25 lifescience and IT companies, and will focus on therapeutics and wireless companies. About two-thirds of the money will go to the life science space and 90% of that money will be put to work in the U.S.

Powell said the firm will continue to put most of its money into series A deals. However, that doesn't mean very early stage companies should expect funding. "The stage of our series A companies is getting later and later," he said. "About 60% of our lifescience investments are spinouts, and a lot of those companies are starting in Phase II."

For every dollar that Sofinnova Ventures initially invests in a company, the firm plans to hold $2 in reserve. The fund's initial investment period will be three years, and the follow-on financings will cover three to four additional years.

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