1. The Development of an Seed Investment Fund in New Zealand
Jerry Balter
Ulysses Advisory Group

2. Ulysses Advisory Group
The Ulysses Group (predecessor to Ulysses Advisory Group )(“UAG”)) In we founded and ran the New Zealand Seed Fund
$13.5 Million fund
Formed 4 companies:
Neuren – neuro drugs and devices mainly developed from growth factors – IGF and HGH
Pacific Edge Biotechnology – diagnostics and drugs focused on cancers of the GI tract
EndocrinZ – drugs for metabolic disease, merged with Neuren
Esphion – Anti- virus software. Sold to Israeli software company
Neuren and Pacific Edge Biotechnology remain the 2 largest publicly traded biomedical companies developed from NZ science and technology

3. The Development of a Seed Fund
Ulysses began working with the MRC Collaborative Center in 1992
The MRC (Medical Research Council) is the equivalent of the US NIH.
In 1994 Ulysses formed Obesys, based on MRC technology
From 1995 to 1997, Ulysses advised the MRC on the development of a venture capital fund whose primary objective was to invest in technologies developed from MRC science
Medical Ventures Management was formed in 1997 with approximately $70 million of available capital
MVM has raised several additional funds since that time and decreased its dependence on MRC science

4. The Development of a Seed Fund
In 1994, Ulysses formed Physiome Sciences
Physiome was the combination of cardio-physiology development at Oxford University, Johns Hopkins University and the University of Auckland
Company was focused on software to develop better electrophysiology drugs and devices
Raised $3 million in 1996 and a total for $120 Million from
JB of Ulysses was initial CEO
Merged with a biotech company, Predix, in 2003

5. The Development of a Seed Fund in NZ
In 1998, NZ had a small venture capital community focused on retailing and software, only one real success
At that time NZ had virtually no life sciences business outside of Ag bio – generally focused on fattening lambs and milk production
University of Auckland had specific expertise in cardiac mapping(Physiome) and growth factors through j-v’s with large companies in the US and Europe( Genentech, Chiron and Pharmacia)
Otago University had broad experience in gene markers focused on cancers of the GI tract.

6. The Development of a Seed Fund in NZ
Ulysses began working with the University of Auckland in 1998 to expand its opportunities with researchers working on conditions to treat stroke and brain trauma
In 1999, U of A and several high net worth individuals asked Ulysses to develop a “US-type” seed investment fund to capitalize on developing technologies in NZ
Ulysses expanded its efforts to include the other research centers in NZ
Early in 2000 the NZ Seed Fund was launched with capital of $13.5 million invested by NZ individuals and several institutional investors

7. The Success of a Seed Fund
Ulysses as the manager of the Seed Fund financed 4 new companies
We recruited experienced managers for all, generally experienced in the life sciences in other places around the world who had some connection to NZ
Often these companies in-licensed or formed J-V’s with complimentary technologies from research institutes outside of NZ to broaden the platform
Generally brought in other sources of capital to provide greater financial flexibility for the companies
Ulysses principals remained active in the management of the companies

8. The Success of a Seed Fund
Neuren:
Capitalized with $7.5 million from Seed Fund, and other investors from the US, Australia and NZ
Recruited CEO from large US pharmaceutical company
IPO in 2005 on ASX
Currently 2nd largest NZ non-Ag life sciences company by market cap – traded on the Australian Stock Exchange

9. The Success of a Seed Fund
Esphion
Capitalized with $2.5 million from the Seed Fund
Software to prevent denial of services attacks
Recruited CEO and board of directors with experience in the space
Sold in 2003 to an Israeli software company

10. The Success of a Seed Fund
Pacific Edge Biotechnology
Capitalized with $5 million in 2001 from the Seed Fund and NZ individuals
DF served as CEO for first 3 years of Company and then we recruited an experienced manager who wanted to move back to NZ
Went public in 2004 on the NZ stock exhange
Largest life sciences public company in NZ

11. The Success of a Seed Fund
Endocrinz
Capitalized with $7 million in 2002
Joint development between Seed Fund, Pfizer and NZ institutional investors
JB initial CEO
Merged with Neuren in 2004

12. Conclusions
The most advanced VC markets for life sciences and software remain the US, Israel and Switzerland
Many researchers with novel products have emigrated to these markets to take advantage of capital and the environment encouraging start-ups
UK and Germany have had concerted efforts over the last 2 decades and have begun to rival the top 3 markets
NZ did not really build on the success of the NZ Seed Fund and has reverted back to small NZ-focused VC investment

13. Conclusions
The development of a vibrant venture capital/start-up environment is dependent on:
Innovation & IP Protection
Management & Know-How
International Regulatory Compliance
Money, Money and More Money

14. What about Turkey?
Has a tremendous amount of engineering related innovation
Should be the gateway of innovation into the Middle East, Eastern Europe, North Africa and Central Asia
Only a modest amount of capital focused on tech innovation
With more capital and more development should be able to recruit Turks with managerial experience elsewhere to return home and to develop a vibrant medical technology business sector