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Venture capital firm Hatteras to invest up to $30 million in seed-stage opportunities

Frank Vinluan on May 16, 2011

North Carolina venture capital firm Hatteras Venture Partners will use about 20 percent of an estimated $100 million to $150 million fourth fund to invest in seed-stage opportunities.

The early stage portion of the next fund is dubbed Hatteras Discovery and will help companies through first-in-man and preclinical studies, Christy Shaffer, a venture partner and managing director of Hatteras Discovery, told attendees of a forum about bridging the “Valley of Death” last week in Research Triangle Park.

Shaffer joined Hatteras in February to lead Hatteras Discovery. Shaffer is the former chief executive officer of Inspire Pharmaceuticals (NASDAQ: ISPH) who took the company public in 2000. Inspire is now in the process of being acquired by Merck (NYSE:MRK).

Only a few details were available about Hatteras Discovery when Shaffer first joined. Shaffer told attendees Wednesday at the North Carolina Biotechnology Center that Hatteras Discovery would be between $20 million to $30 million and invest in 10 to 15 companies. Initial investments would begin at $250,000, but would include follow-on money.

After these investments completed early stage research, Hatteras would determine whether to create new companies based on the funding, or license the drug to another pharmaceutical company. Focus areas would include oncology, orphan disorders and focused therapeutics areas, and would likely avoid cardiovascular areas, Shaffer said.

Hatteras Discovery is meant to create a pipeline of companies that could either be funded by Hatteras IV or taken to strategic partners, Shaffer said.

Hatteras has about $120 million currently under management. The firm is still making investments from its third fund, an $83 million fund launched in 2007 that focuses on seed and early stage investments in biopharmaceuticals, medical devices and other areas of medicine. That fund’s investments include Triangle companies CancerGuide Diagnostics, Clinipace Worldwide and Viamet Pharmaceuticals.

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