Provident launches Principals Fund I with $25 million of committed capital

Provident Healthcare Ventures, LLC ("Provident") is pleased to announce the launch of its inaugural Principals Fund I (the "Fund") with $25 million of committed capital. All capital invested in the Fund will be provided by the principals of Provident, affirming their belief that providing early-stage healthcare services companies with crucial resources, such as capital and operating expertise, will significantly increase enterprise value over the life of the investment.

“PHP's proven ability to identify quality companies and strong management teams at an early stage, and then exit at significant premiums, is the cornerstone of all successful venture investments.”

The Fund includes both an incubator for early-stage start-up funding, as well as more traditional seed funding for larger investments and more mature operating companies. Investments will range from $250,000 to $3 million, and focus on a number of growing healthcare services sectors, including but not limited to homecare, hospice, specialty/institutional pharmacy, infusion therapy, and disease and therapy management.

"Provident Healthcare Ventures is a natural extension of what we've done for more than a decade," said Bob Ciardi, Managing Partner of Provident Healthcare Partners ("PHP"), an investment bank specializing in M&A in the healthcare services industry and one of the principal investors in Provident. "PHP's proven ability to identify quality companies and strong management teams at an early stage, and then exit at significant premiums, is the cornerstone of all successful venture investments."

Added Bill Shepard, Managing Director of Provident Healthcare Ventures, "We believe the healthcare services sector in the lower middle market is a growing, fertile landscape for entrepreneurship. It's fueled by the robust mix of an aging population and therapies and treatments that cure or manage chronic diseases, which enable patients to live longer, healthier lives. Committed investors, committed capital and committed entrepreneurs are the proven components for success in this industry segment."

According to research conducted by Provident, the demand for funding in the $250,000 to $3 million range is enormous; however, availability of funds is in short supply for investments of this size. In addressing this market, Provident will provide working capital, business development, legal, accounting, clinical, compliance, and operational assistance to its portfolio companies. Provident believes these services are vital for development stage companies to expand quickly while maintaining operational and clinical integrity, and will ultimately result in improved earnings and higher valuations.

The Fund will also provide capital for follow-on investments to ensure portfolio companies that the Fund has the capacity and vision to provide later rounds of financing.

Proven Track Record

The management team at PHP, which will be actively involved in the Fund, has a proven track record for identifying and advising small to mid-sized companies in the healthcare services industry. Additionally, PHP has represented hundreds of companies in negotiating successful liquidity events at a premium. Since its founding in 1998, PHP has managed in excess of 100 transactions with values ranging from $5 million to $500 million.

Ciardi said, "Merging the skill set of a venture fund with our investment bank is not only strategic, but creates an environment for extraordinary opportunities. Provident's principals will not be passive investors. We intend to roll up our sleeves and help early-stage companies execute their business plans, move toward sustained profitability and, ultimately, a successful exit at a premium," emphasizes Ciardi.

The Fund has been established as an "evergreen fund"; realized gains from the successful exit or sale of companies will be reinvested in other portfolio opportunities. Provident's goal is to invest in at least three to six companies per year. Unlike other venture funds, which shut down after investing all of their capital, Provident will use its returns to replenish its investment pool, creating a sustainable model to continue financing and investing in companies for years to come.

Companies interested in discussing their capital needs should call Provident Healthcare Ventures in Boston at 617-367-5000.

This announcement does not constitute an offering of securities nor a solicitation of offers to buy securities. All capital invested in the Fund is being provided by the principals of Provident.

Source: Provident Healthcare Ventures