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Two veterans of the health care industry have teamed up to create the first local venture-capital fund to specialize in investments in earlystage, fife-sciences companies.
Vital Venture Capital LLC was formed by George Emont and David Phelps.
"This area is really ripe for this kind of an effort," Emont said.
He declined to discuss the fund's size or other details, but he said the firm is applying for the U.S. Small Business Administration's designation as a Small Business Investment Corporation.
To become an SBIC, venture-capital firms must have a fund that is worth at least $30 million. Of the $30 million, $10 million must be raised by the fund organizers, which will be matched by $20 million the SBA will contribute.
As part of that necessary $10 million in capital, Vital Venture has received a $3 million commitment from Commonwealth Seed Capital LLC, said Craig Greenberg, general manager of Commonwealth Seed Capital, a venture-capital fund created by state government to invest in other Kentucky-based venture-capital funds.
Phelps declined to discuss details, but he said, "we're well along the way, including the $3 million commitment from Commonwealth Seed Capital."
Vital Venture also has received preliminary approval for 40 percent in tax credits from the Kentucky Investment Fund Act, which is administered by the Kentucky Economic Development Finance Authority.
Once the fund closes and the credits are finalized, the tax credits will be awarded to Kentucky-based investors in Vital Venture after the fund invests in Kentucky companies, Phelps said.
"Commonwealth Seed Capital looks forward to closing on its commitment and for Vital Ventures to start making investments," said Greenberg, who also is an attorney with Frost Brown Todd LLC law firm. "It's a needed resource to invigorate our local life-sciences business community."
First deal could occur this year
If all goes according to plan, "we hope to make our first investment by the end of the year," Phelps said.
Phelps and Emont have been "meeting with companies over the last several months, and there are several we are interested in," Emont said. He declined to identify the companies because he and Phelps have not started the due diligence process.
Vital Venture is an important part of the efforts to increase Louisville's reputation in the health-related area,...