With the launch of www.activatevp.com, we are replacing the Milestone Venture Partners brand with the Activate Venture Partners brand. Glen Bressner and I serve as Activate’s Managing Partners, while Ed Goodman is an Investment Partner. Our new fund has invested in three promising portfolio companies (Diameter Health, Digital Pharmacist, and Healthify) and seeks to make approximately 15 new investments over the next five years. We primarily lead or co-lead our investments with an initial investment of between $750,000 and $3,000,000. In aggregate, our partners currently manage over $200 million of committed capital while Activate’s current fund has approximately $50 million to start (a number we plan to grow in the coming months).
Adopting Activate in place of the Milestone brand is emotionally charged for us because we worked hard to build Milestone over 17 years. Not many NYC venture firms started investing just after the Internet bubble collapsed and then managed their way through the 9/11 attacks, the financial crisis, the Great Recession, and the rise and potential fall of the Affordable Care Act. To the contrary – many NYC venture firms disappeared during this time frame.
We have witnessed a remarkable parade of technological advances. The Internet, e-commerce, smart phones and social media have been particularly fecund. The rise of vertical Software-as-a-Service applications, cloud computing, and big data analytics has also been durable. AI and machine learning, while getting over exposed as of late, are making their mark. But one reason for our success and longevity is that, beginning with our first healthcare-focused investment in 2002, as each year passed, we deepened our expertise, track record and reputation in the Digital Health space just as our nation started to wrestle with the scope of its healthcare challenges.
With Milestone transitioning to Activate, Milestone has addressed a challenge many venerable firms have failed to face – executing a succession plan. Richard Dumler has already scaled back his time commitment significantly and Ed Goodman will be ramping down in due course. We initiated a partner search last summer and I will chalk it up to good karma that we very quickly discovered that Glen Bressner, a storied venture capitalist with a remarkable track record both in and out of the healthcare markets, was looking for a new partner too.
Establishing a new brand is tricky but we think it makes the most sense given that Activate Venture Partners combines and harmonizes the investment approaches and experiences of our partners. With offices in New York City and Bethlehem, PA, Activate invests in high growth, early stage technology businesses easily reached from our offices. We plan to back entrepreneurs with the kind of domain expertise and industry relationships which enable them to close early reference customers. We particularly gravitate toward founders who know how to build great businesses with very little capital. Most of these businesses will generate high-margin recurring revenue from software and/or data subscriptions and many of them will operate in the healthcare or financial verticals, but our minds are open to a variety of business types and markets. To Glen’s credit, he has made money backing companies in a diverse array of industries. I will continue to spend the bulk of my time cultivating healthcare opportunities.
Technically, the new fund vehicle, Activate Ventures II LP, is the result of a combination between Milestone Venture Partners V Digital Health LP, which Ed Goodman and I co-founded and managed out of New York City, and the successor fund to Originate Growth Fund LP, which Glen Bressner co-founded and managed out of Bethlehem, PA. Management of Milestone’s portfolio companies from prior funds will not materially change, as Richard, Ed and I, with assistance from Jeff Davison, will continue to serve them.
Activate’s partners have a long history together. We first co-invested in CareGain in 2004, a successful Digital Health investment, which was a pioneer in software for health plans and consumers seeking to manage consumer-directed health plans and accounts. We made a handful of additional investments together, one in fintech and one in enterprise computing. Most importantly, we discovered, after independently investing in more businesses than we care to admit which spent and raised too much money, that we share the same commitment to backing capital-efficient entrepreneurs. The entrepreneurs we seek to back create value for their shareholders by carefully managing expenses and avoiding the dilution, liquidation preferences, and distractions that come with unnecessary capital-raising exercises. They are committed to customer-driven and often customer-financed product innovation, to the careful timing of increased sales and marketing investments, and to striking the right balance between growth and profitability.
One of the great benefits of our combination and relaunch as Activate is that we have even deeper expertise and resources in healthcare as well as in other compelling markets. In healthcare, Activate now leverages, for the benefit of our investors and current portfolio companies, experiences derived from over 25 investments, 13 of which have achieved successful exits. Collectively we have invested in six financial technology companies, four of which have achieved successful exits. But perhaps most importantly, we have a web of relationships built up over decades in our target geography and industries which can be mined for potential investments and tapped for the benefit of our portfolio companies.
We are energized about our future, look forward to telling the Activate story to our many friends and colleagues, and believe the best is yet to come.