ABOUT THIS COMPANY

ABOUT THIS COMPANY

Founded in 1988, St. Paul Venture Capital has roughly $3 billion in capital under management, making it one of the nation's largest venture capital firms. The source for all of the fund's capital-including its latest and largest round of $1.3 billion-is its sole limited partner, the St. Paul Fire and Marine Insurance Company. St. Paul VC expects to allocate its latest fund over a period of three to four years. According to the VC, the exclusive arrangement with its limited partner gives the company greater flexibility. Because it only has one partner to please, the VC says it can make long-term deals rather than going after short-term profits to keep a group of investors happy. Another bonus: "Having to spend time with only one LP leaves more time to spend on investments and our portfolio companies," managing general partner Patrick Hopf said in an interview with Venture Capital Journal.

Investment strategy: early-stage focus

While St. Paul VC backs companies at various levels of development, the majority of its investments are early stage. (The firm estimates that a healthy 20 percent of investments are made in later-stage firms.) With a large insurance company as a solid source of capital, St. Paul VC can invest anywhere from $1 million to $15 million over the life of an investment. St. Paul VC invests primarily in the areas where the company has offices: Minneapolis, Boston, and Silicon Valley. The firm has a fund set up specifically for investing in Minnesota businesses. That fund is run by managing partner Michael Gorman and includes investments in all types of firms. In Boston, the company is focusing on the communications and wireless sectors, while in the Valley, primary areas of investment are Internet and consumer services businesses.

Portfolio: 7-prong focus

The firm focuses its investments in seven areas: consumer information technology; consumer products and services; communications; e-commerce; healthcare and life sciences; enterprise information and software; and the previously mentioned Minnesota-targeted investments. The e-commerce portfolio, run by general partners Gorman, James Simmons, and Brian Jacobs, contains stars such as DirectAG.com, net.Genesis, and Net Perceptions. The health care portfolio, which is run by managing general partners Patrick Hopf, Everett Cox, and Nancy Olson, includes Domain Pharma, Eclipsys, and Prometheus.

General partners: no hegemony

Unlike other high-rolling VC firms, the general partners of St. Paul Venture Capital hail from all kinds of backgrounds and academic locales. Managing general partner Patrick Hopf, a graduate of the University of Minnesota and UVA, specializes in retail and consumer investments. Before founding St. Paul Venture Capital, Hopf headed the venture capital operations at T. Rowe Price. Nancy Olson, a Berkeley and Wharton grad, concentrates on the firm's investments in companies producing medical devices and healthcare services technology. St. Paul VC is expanding rapidly, having brought three partners and a principal on board in a six-week span at the end of 2000.