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Baird Capital has just closed its fourth venture capital fund, totaling $185 million. The firm said the fund was over subscribed, as they intended to originally raise just $150 million.
“I think it's been an exciting period for the market overall over the last several years,” said Baird Capital partner Jim Pavlik. “There’s been a really nice wave of innovation and entrepreneurial activity. You are starting to see it more broadly in the venture market as well.”
Baird investors in particular had an “interest in continuing to have exposure to the venture market,” said Pavlik. “We’ve had relationships with a number of institutional investors over the years,” and they chose Baird as “a bet behind the team, historical performance and strategy.”
Several of the fund’s institutional investors include Century Insurance Wisconsin Alumni Research Foundation, State of Wisconsin Investment Board, Venture Michigan and Shelter Insurance.
Baird invests in two areas: tech enabled services and healthcare. For tech enabled services Pavlik said that breaks down to human capital, digital marketing, and financial technology companies, and for healthcare the firm focuses on healthcare IT, medical devices, tools and diagnostics. Pavlik said initially it tends to invest $2 to $7 million in early stage companies and $10 million to $15 million over the life of each investment.
Pavlik said those focuses align nicely with general trends they have seen in Chicago tech over the past several years. For its part, Baird has invested in several Chicago startups including Signal (formerly Brightag), SitterCity, and PharMEDium, which it exited from in January 2014. Baird Capital also invested in edo Interactive, which has a big Chicago presence.
“Expect to see more investment activity from us here locally,” said Pavlick.
This big fundraising round comes as venture capital is flowing into startups at record levels. In the first half of 2014, Built In Chicago’s data showed a record breaking $468 million raised by digital startups. Numbers like that have been driving a lot of speculation about overvalued startups and a new tech bubble. Despite the chatter, Pavlik doesn’t see it.
“Certain segments might be a little over heated driving valuations that we are uncomfortable with,” said Pavlick. But, “we are seeing a pretty high volume of opportunity. That issue is really on a case-by-case basis.”
Baird Capital has already invested in five companies from its fourth fund: Catalyze, emids, Integrated Diagnostics, NeuMoDx Molecular, and WordStream.
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