Jeff Davison says there aren’t many investors funding early-stage companies in Delaware and the mid-Atlantic region.
He would know. He’s been working in the venture capital realm for more than 30 years.
About a year ago, at the request of Ernie Dianastasis — the chairman of First State Innovation, a private organization that focuses on accelerating Delaware’s entrepreneurial community — Davison and four others, all with backgrounds in venture capital, business, science and technology, began to work together to form a viable venture capital group.
Last month, Leading Edge Ventures was officially launched.
"We're a group with a lot of relevant experience and a lot of value. We're planning to invest in interesting and promising companies that are local."
The group of partners — Davison and Doug Petillo, both venture capitalists who have advised more than 50 companies; Rick Birkmeyer, CEO of CD Diagnostics in Wilmington; Vance Kershner, founder and CEO of Labware, Inc. in Wilmington; Mike Bowman, associate director of the University of Delaware’s Office of Economic Innovation and Partnerships (and director of the Delaware Small Business Technology Development Center) — began raising funds a year ago.
The group is headquartered in the Delaware Technology Park in Newark (another Bowman charge) and has raised roughly $10 million, Davison said.
“We’re a group with a lot of relevant experience and a lot of value,” he said. “We’re planning to invest in interesting and promising companies that are local here.”
Davison said the group is looking primarily to invest in IT and healthcare businesses, but there is no specific industry focus. Companies the group is interested in investing in might be looking for their first round of angel funding and equity — picture a startup, a small management team or a company with a few customers that has a product that’s still in development.
He said each entity the group invests in could receive funding from $500K to $3 million; Leading Edge Ventures could serve as the lead investor or the co-lead, depending on the circumstances, Davison said. The company has not yet made an investment.
“We’re looking to invest in companies that we think have a competitive advantage that can be sustained over the life of the investment,” Davison said.
Davison said the group recognizes the need for Delaware companies to have access to funding, but also sees the value in expanding the geographic boundaries to the entire mid-Atlantic region. He said he can count the number of investment groups in the region on one or two hands.
“I think we will be a resource for local companies that are here in Delaware,” Davison said. “There’s no question that having a fund like ours will be helpful and an important contributor to the environment.”
Davison said he sees Leading Edge Ventures as filling a void not just in Delaware, but in the regional investment space as well.
“If you’ve followed the venture capital business, you know and agree that over the past 10 years — professional venture capital funds have declined dramatically,” Davison said. “There are a number of angel groups and small venture funds that have filled in to take the place of those firms. They’re generally small, there’s not that many and they work cooperatively together. We’re one of those.”