"As Silicon Valley-based InterWest Partners marks its 30th anniversary this year, the firm has a lot to celebrate. The company raised $33.7 million for its first fund, and is now investing its 10th fund of $650 million. The total capital under its management now exceeds $2.8 billion. Over the years, InterWest has backed a number of notable companies, including Myogen, which was sold to Gilead for about $2.3 billion; Cor Therapeutics, which was acquired by Millennium; and Corixa, now under GlaxoSmithKline.
InterWest invests in both life sciences and IT, with about two-thirds of the latest fund going to the life sciences. The firm favors early-stage investments and therapeutics products, with a focus on such areas as unmet needs, pain management, opthalmology and orthopedics, among others. But as the market shifts toward personalized medicine, fund managers have been eyeing the predictive medicine and biomarkers space, says Partner Chris Ehrlich. A large portion of the company's resources--about 25 to 30 percent--has also gone to building biotech and medical device companies from the ground up. Not only does the firm maintain its own scientific advisory board, but its own employees also engage in research and discoveries. Two of the firm's portfolio companies, Anesiva and Arcion Therapeutics, were built on the discoveries of one of the firm's associates, Dr. James Campbell. The company also collaborates with university researchers to help bring their discoveries to the industry. As for the impact from the economic climate, ""Biotech continues to march on,"" says Ehrlich. ""People are paying attention and realize there's still money to be made here."" For the most part, it's still business as usual for this venture capital firm. But Ehrlich says the company has been spending more time evaluating potential investments before closing a deal. As companies can't go public on a predictable basis, InterWest--like many VC firms--is focused on strategic partnerships and acquisitions. ""In the past it was 'if you built it, someone will come',"" explains Ehrlich. Now fund managers are far more diligent in evaluating the product and at what stage the company may be acquired. A team looking to do well in this sector needs three key ingredients, says Ehrlich: revolutionary technology, super-innovative management and a lot of luck. Of course, a successful company will need money too. To get a hold of this firm's funds, you'll also need drive. ""People really should be persistent,"" he explains. Successful teams are sometimes turned away several times before they land a deal with InterWest. What ultimately won the firm's support was that the team ""listened thoughtfully without being irritated with what we had to say and they implemented the suggestions and they came back,"" he adds. ""Getting to know a company over time makes you feel extra good when you finally invest.