Seattle-based Frazier Healthcare Ventures plans to open office in Bay Area

Seattle-based Frazier Healthcare Ventures, one of the first venture capital companies in the nation to focus exclusively on healthcare investing, is opening an office in Palo Alto, Calif., to be closer to more deals.

By Tricia Duryee
Seattle Times Eastside business reporter

Patrick Heron, a Seattle native who has been working for Frazier here for four years, will move to California to open the office. He said the additional location makes sense because about 30, or half, of the company’s investments are in California.

The expansion comes when other venture companies are cutting back or closing down offices in the Seattle area. The international Atlas Venture and Menlo Park, Calif.-based Mohr, Davidow are closing their Seattle-area offices.

"People are shutting down offices up here, and down there (in the Bay Area) you have VC firms winding up and cutting back," said Alan Frazier, who founded the company in 1991. "But we look at the world as eight deals a year — half in the Bay Area — and this is pretty much a way to do that better."

In addition to sending Heron to start the office, Frazier Healthcare plans to hire a venture partner and transfer an associate to California. It also intends to have an "entrepreneur-in-residence" in both offices, a position that allows an entrepreneur to research an idea before launching or joining a new company.

Even before the move, Frazier said he considered his company to be national, with the bulk of its investments in Seattle, San Diego and the Bay Area.

Heron said all the partners travel frequently to the San Francisco area; he flies there once or twice a week. Likewise, Frazier said all five of the boards on which he serves are in California.

Although the Seattle area, with the former Immunex (acquired by Amgen) and the Fred Hutchinson Cancer Research Center, is known for its biotechnology strengths, the Bay Area saw 101 healthcare investments valued at $808.8 million in 2002. That compares with the 15 deals and $148.1 million invested in Washington state.

John Taylor, vice president of research at the National Venture Capital Association, said Frazier is making a bold move. "They may be ahead of the curve on that," he said. "The (Silicon) Valley is dominated and associated with (information technology) investing."

Frazier is now investing its fifth fund, worth $400 million, and has more than $750 million under management.

Tricia Duryee: 206-464-3283 or [email protected]

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