Swan Ventures was founded in 2000 primarily to benefit
Silicon Valley physicians. Our first fund, Swan Ventures L.P.,
invested in a diversified portfolio of venture funds, with an
emphasis on healthcare and biotechnology.
After a successful first fund, Swan Ventures expanded its limited partner base and altered its objectives. Our second fund, which closed in June 2006, is intended to promote philanthropy. The General Partner will donate a portion of its proceeds to nonprofits, primarily those involved in women’s and children’s health. Although not a requirement, our individual limited partners are encouraged to donate a portion of their gains to nonprofits of their choice. Swan Ventures also now
accepts institutional investors, with a preference given to nonprofit
foundations and to institutions involved in health and education.
Swan Ventures does not invest directly in start-up companies. Using
a fund-of-fund mechanism, we invest only in the funds of other venture
firms. We target for investment a diverse portfolio of venture capital
funds whose management has a proven record of high rates of return to
their limited partners. While diversification remains a critical element
of our investment philosophy, we plan to have a larger proportion of
investments in the life sciences than most other fund of funds do. We
will also consider investing in emerging funds that have managers with
proven track records from prior venture firms.
Access to top-tier venture funds is the most critical issue venture
fund of funds currently face. Top-tier venture firms are raising smaller
funds. The slots they are offering are more difficult than ever to obtain,
and they also are smaller. The Swan Ventures investment team has access
to these funds through its personal relationships with top-tier managers.
Additionally, the smaller slot sizes have created a relative advantage
for Swan Ventures. A large fund of fund will have a more difficult time
placing all its investments. This is not an issue for Swan Ventures.