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Tampa biotech’s investment struggles play a key role in creation of a new fund

Margie Manning

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Kerriann Greenhalgh, founder, chairman and CEO, KeriCure

A Tampa biotech entrepreneur is going to New York — temporarily — to find mentors and investors who understand her business.

Keriaan Greenhalgh, chairman and CEO of skin and wound care products company KeriCure, will be one of 15 founders taking part in Quake Capital’s spring 2019 cohort, a 12-week program that starts next week.

“I’m really excited because it opens up a whole new group of people that we haven’t really had access to in Florida. Here, we’ve maxed out our resources and ability to grow, so I think it’s the right time for us to venture into a new pond,” Greenhalgh said.

She hopes the creation of a new fund in Tampa Bay will change the local investment dynamic for medical technology startups. The new fund, Seed Florida, is a for-profit fund created in collaboration with University of South Florida and Florida Funders, and will focus on startup companies spun out of Florida’s research universities. Seed Florida has an initial grant from the U.S. Economic Development Association, and Florida Funders expects to raise $5 million to $10 million for the fund, Marc Blumenthal, general partner of Florida Funders, previously told St. Pete Catalyst.

Greenhalgh will be on Seed Florida’s advisory board, and she said it would be a big step to help Florida university spinouts and companies like KeriCure, a company with technology licensed from USF.

Her struggle to find financial backing for KeriCure provided part of the impetus for the new fund.

“We’ve had angels and individuals to invest with us. But I spent a year and a half banging my head against the wall at every Florida Venture Forum and other presentations. People loved the product but didn’t understand what we were trying to do,” said Greenhalgh.

The advisory board will provide the tech expertise to investors in Seed Florida.

“These people know the industry, the medicine, the technology and the science … and they think this is a good idea,” Greenhalgh said.“It will relieve some of the pressure for the investors and they can feel more confident in the investment.” 

KeriCure’s skin and wound care products use a polymer technology that Greenhalgh designed when she was in graduate school at USF. She won a license from USF to commercialize it and formed KeriCure in 2011, then launched the company after raising funding. KeriCure won deals in 2013 with Publix and Kroger stores in the southeast U.S. to carry its over-the-counter liquid bandage products..

She hopes to tap the Quake Capital network as KeriCure seeks a private label or licensing partner for its animal health products.

KeriCure also has developed wound care products with a stronger polymer, designed to be used by physicians, and Greenhalgh hopes the people she meets through Quake can help with clinical studies for those products.

Quake Capital is a seed and early-stage venture capital fund and accelerator program. During the 12-week accelerator, each company gets intense, hands-on mentorship; connections to a network of founders, Quake alumni and mentors around the world; and office space and other perks. The program concludes with a demo day, where founders can pitch to as many as 200 investors with specific interests in the companies’ industry sectors.

“That’s the difference for us. They understand we are a biotech company and that’s the type of people we need investing in us. Otherwise, they don’t understand our struggles and our growth opportunities. We’re excited to finally get to pitch to biotech venture capitalists who get it. They get what we’re doing and our potential,” Greenhalgh said.

Quake and a partner, Hatcher +, invest about $200,000 in each of the companies that take part in the program, in return for an equity stake in each company.

For KeriCure, part of the investment is straight equity, and part is advisory shares. Advisory shares are reserved shares from KeriCure’s option pool, issued in return for a three-year commitment from Quake to serve on KeriCure’s advisory board.

“It gets them committed for the long term for us as well,” she said. “It keeps their feet to the fire and keeps them active with us, which we love.”

Companies that were in Quake’s past two cohorts have raised more than $35 million in follow-on capital, with more than 80 percent of participants successfully raising a follow-on round.

 

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