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Minnesota Investor Raises $107M for Medtech Fund

Help is on the way for medical device makers struggling with financing.

SightLine Partners has raised $107 million for a fund that will support late-stage medical technology companies and their investors—specifically, entities that have had trouble financing portfolio companies or Big Exits. And while the money will not go to startups, the Minneapolis, Minn.-based firm will bail out investors eager to sell their shares in startup companies.

"We are encouraged by the tremendous interest in the Fund, from an excellent group of investors," SightLine Managing Director Buzz Benson said in prepared remarks. "Our investment strategy of providing creative financial alternatives to existing investors in late-stage medical technology companies has been well-received in the market. There continues to be a critical financing gap for many high-quality companies in the medtech sector and SightLine Partners is qualified to offer solutions to both the companies and investors facing this challenging environment."

The firm's latest fund—called SightLine Healthcare Opportunity Fund II—drew strong investor interest, beating its initial fundraising goal of $100 million.

The amount of funding available to late-stage companies (those about six to 12 months away from a liquidity event such as a buyout or initial public offering) has eroded significantly over the last five years. Since early 2009, SightLine has provided financial alternatives to existing investors in late-stage companies who may not have sufficient capital to support current portfolio companies and risk having their preferred ownership converted to common, or wish to achieve liquidity on certain portfolio companies, need to reduce or eliminate future funding requirements, or want to rebalance and reallocate fund reserves.

Joe Biller, Managing Director at SightLine, added, "Our investment strategy is well-suited to the current financing environment in the medical technology marketplace, where many late-stage companies are requiring more capital and time to achieve a successful exit. We continue to see opportunities which have a near term clarity of exit and which provide the best potential for risk-adjusted returns."

SightLine also announced that Scott Ward, a venture partner at the firm, will now serve as managing director. Ward was an executive at Medtronic Inc. before joining SightLine.

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