Genesis Innovation Group, a Holland, MI-based collective of enterprise investors focused on early-stage medical device startups, is raising a new $10 million fund named Cultivate(MD) Capital Fund I.
Genesis isn’t the typical venture capital firm. In an interview Earlier this season, CEO Rob Ball said it is a consulting team composed of accredited private investors with deep knowledge in the medical device area which also invests in their customer companies.
The objective of Cultivate (MD), Ball says, is to invest in later-stage medical device companies, particularly in orthopedics. Because the new fund is a private placement, it’ll be open to a limited number of accredited investors already in the Genesis system rather than the public at large. Genesis will associate with Cultivate(MD) to set up its team and network, Ball says, with the overall objective of lowering the cost of healthcare while improving service to patients.
“We understood that Genesis Innovation Group is especially focused on “as we have been effective in creating opportunities, the demand for funds was there and there was lots of attention within our network to participate further.”
Although the new fund is looking to invest in businesses across the country, there’s a demand for more later-stage capital in Michigan. The state’s VC community has grown exponentially in the past decade, but there are still funding gaps.
According to the Michigan Venture Capital Association’s latest annual report, there is a shortfall in follow-on capital for existing portfolio companies in Michigan, and 44 percent of their MVCA’s members currently raising capital stated they believed “less than optimistic” that they could increase the money solely from Michiganders.
Cultivate(MD)’s health director, University of Michigan alum R. Sean Churchill, is an inventor himself. The orthopedic surgeon, who lives near Milwaukee, WI, was engaged in “developing a number of shoulder replacement and extremity fixation devices,” Ball says.
The new fund has already made its first investment, soon to be officially announced, in Shoulder Innovations, A Genesis portfolio company which makes implantable shoulder replacement systems. Ball declined to disclose the amount of the investment.