Safeguard typically deploys up to $25 million in growth capital in entrepreneurial growth-stage life sciences and technology businesses. In life sciences, Safeguard targets high-value areas of Molecular and Point-of-Care Diagnostics, Medical Devices, Regenerative Medicine and Specialty Pharmaceuticals, which represent lower regulatory risk and near-term revenue. In technology, Safeguard targets recurring-revenue companies in three segments: Internet / New Media, Financial Services IT and Healthcare IT, which share a “transaction enabling” thesis and are near cash-flow positive. We believe this diversified strategy exploits the growth and counter-cyclicality of these sectors, providing investors opportunities to realize value more consistently compared with funds focused primarily on one sector.
Rapid, significant revenue growth and/or low regulatory risk are key factors in deciding to deploy capital in these life sciences and technology segments. These milestones clearly demonstrate value to investors and potential M&A partners. Target companies generally have developed their science and technology and have begun to commercialize that science and technology or enlarge its market penetration. Strong syndication partners bring additional expertise and resources to support partner company management and help to ensure that companies are adequately fi nanced to exit or profitability. Safeguard’s current partner companies reflect this strategy and its companies are poised for success.
Safeguard provides capital to growth-stage life sciences and technology businesses that address five general themes:
-
Maturity — Many existing technologies, solutions and therapies are reaching the end of their designed lives or patent protection; the population of the U.S. is aging; IT infrastructure is maturing and the sectors are consolidating; and many businesses based on once-novel technologies are now facing consolidation and other competitive pressures.
-
Migration — Many technology platforms are migrating to newer technologies with changing cost structures; many medical treatments are moving toward earlier stage intervention or generics; there is a migration from generalized treatments to personalized medicine, many business models are migrating toward different revenue-generation models, integrating technologies and services; and traditional media such as newspapers and print advertising are migrating online.
-
Convergence — Many healthcare and technology business are intersecting in fi elds like medical devices and diagnostics for targeted therapies. Within healthcare itself, devices, diagnostics and therapeutics are converging.
- Compliance — Regulatory compliance is driving buying behavior in healthcare and technology. HIPPA, Sarbanes-Oxley, the FDA and the SEC are dictating how businesses spend their money.
-
Cost containment — The importance of cost containment grows as healthcare costs and IT infrastructure maintenance costs grow and as a recessionary dynamic weakens sectors of the economy.
These strategic themes tend to drive growth and attract entrepreneurs who need capital, operational support and strategic guidance. Safeguard deploys capital, combined with management expertise, process excellence and marketplace insight, to provide tangible benefits to our partner companies and sizeable gains to our investors.