Venture Capital & Health Care Journal
Prospect Venture Partners, Palo Alto, has created a stir among health care investors by landing Dr. Russell C. Hirsch and Dr. James B. Tananbaum as general partners. The appointments do more than confirm that Prospect Venture Partners’ star is rising. They also illustrate how health care investors are benefiting from other venture capital firms’ move away from the sector.
Dr. Hirsch, formerly a medical and scientific researcher, joined Mayfield Fund, Menlo Park, CA as a health care investor in 1992. But the firm, which had been a founding investor in biotech stalwarts like Millennium Pharmaceuticals, moved Dr. Hirsch to its e-commerce team when it stopped making health care investments in 1999. Standing in the lobby of the St. Francis Westin Hotel in San Francisco last month among other attendees of a health care investing conference, Dr. Hirsch said he felt “like a pig in mud” to be back in the health care field.
Mayfield Fund, like fellow Menlo Park firm, Menlo Ventures, isn’t actively seeking to make new health care investments. However, both firms insist that they would invest in health care if the right company came along. Unlike Dr. Hirsch, Dr. Tananbaum never actually left the field. A former general partner of Sierra Ventures, Menlo Park, Dr. Tananbaum left the firm several years ago to help form Advanced Medicine, a biotech company that in 1999 raised $159 million from investors including Microsoft Chairman Bill Gates and Sierra Ventures itself.
In joining a health care-only firm, [Prospect Venture Partners with Alex Barkas PhD and David Schnell, MD], Dr. Hirsch and Dr. Tananbaum followed a well-worn path….
Prospect Venture Partners is now seeking to raise a fund that should be considerably larger than its $100 million debut partnership. California Public Employees’ Retirement System already has committed $100 million to the follow-up fund.
Prospect Venture Partners was founded as a health care-only investor in 1997 by David Schnell and Alexander E. Barkas, both formerly of Kleiner, Perkins, Caufield & Byers, another Sand Hill Road giant.