socialmedian: Combining Portfolio Companies To Save Them

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Combining Portfolio Companies To Save Them

Source: Buzztracker.com - Venture Capital

Nov 05, 2009

Summary

Last week I reported that Mohr Davidow had combined two of its cancer-fighting biotech startups — CELLective Diagnostics and The DNA Repair Company — into a third, new company called On-Q-ity.

Last month I reported that Box.net, a Draper Fisher-funded service to share and store content online, had purchased another Draper, Fisher-backed company — Increo.

It turns out that this is a trend. Mohr Davidow’s Sue Siegel said she knew of two other venture firms that are talking about ways to combine each other’s portfolio companies, and a glance through the tech blogs of the last couple months shows that Softbank Capital and angel investor Ron Conway may be doing the same.

Softbank’s and Conway’s PureVideo Networks was reported last month to be acquiring another one of their investments, DanceJam, although it’s not clear whether the acquisition happened.

These combinations are an effort to salvage investments at a time when fundraising is tight and the economy is still depressed, although Siegel stressed that creating new companies out of existing ones is not an easy ro

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