S3 Ventures' new $75M fund will aid early-stage device startups

Medical device startups have complained for a while now that funding options for fledgling companies are few and far between. S3 Ventures in Austin, TX, is revving up to help fill that gap with the launch of a $75 million fund devoted in part to development-stage medical device startups.

The Austin American-Statesman reports that S3 is set to formally announce the fund today, which will also focus on information technology companies. Plans call for keeping the investments small--$4 million to $6 million a piece--with between 12 and 15 total investments.

S3 Ventures is a relatively small venture investment firm, with $170 million under management, according to its website. But every little bit helps in an era when venture investors are increasingly avoiding medical device and diagnostics startups until their product reaches a certain level of development that diminishes risk. Current S3 investments cover the IT realm, with at least one medical-device related enterprise in its portfolio: OrthoAccel Technologies in Houston, a developer/maker of dental care and orthodontic treatment devices and tools.

Earlier this year, at least one other larger VC firm said it was embracing the early-stage investment void. Third Rock Ventures launched a $516 million fund in March intended to help roll out up to 16 new medical device, diagnostic and drug companies that help bring something new and disruptive to the marketplace.

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Special Reports: Top medical device VC investments of 2012 | Top Dx VC investments of 2012

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