Lightstone Ventures unveils $375M third fund, this time expanding its wishlist in blossoming CNS field
Neuroscience is having a moment right now, and one VC firm straddling the line between biotech and medtech is looking to capitalize on the field’s rapid growth.
Lightstone Ventures has raised $375 million for its third venture fund with an eye on expanding its focus in CNS disease, the firm said Tuesday.
The newest raise brings Lightstone’s total to more than $850 million since the firm was founded back in 2012. So far, that treasure chest has led to investments in around 30 companies split across the biotech and medtech spaces. With its third and largest fund, Lightstone is expecting much the same as before — mostly investments in seed-stage to Series A companies with an eye on “breakthroughs” in patient care, general partner Jason Lettmann told Endpoints News.
What is new, Lettmann said, is a broader focus on CNS startups, which continues Lightstone’s pivot into that space dating back to the firm’s second fund. But the team is also keeping the door open in other therapeutic areas.
“Looking forward, we are planning to spend a lot of time (in CNS),” Lettman said. “We really do believe CNS is the next frontier. We’re going to try to spend more time in the underappreciated areas, whether that’s autoimmune, immunology, etc. That’s where we’ll probably look.”
In terms of targeted deal size or how many companies are on the hit list, Lettman was mum, saying Lightstone will look at deals of roughly the same size and development stage, this time with more capital flexibility, and remain open to “opportunistic” late-stage flyers.
In early-stage investment, one of the biggest debates among VCs is the product-vs-platform paradigm, and Lettmann had some thoughts on exactly how his firm thinks about that divide. Lightstone targets what it calls platform plays in both the biotech and medtech space but asks companies to quickly narrow the focus around a single or clutch of products.
“We don’t invest in platforms just for the sake of a platform,” Lettman said. “I think one of the things we’re most proud of is how many of our companies have ultimately developed therapies that have been approved in patients. So I think our strategy is to find things where there are multiple shots on goal but really quickly pivot to a product focus.”
Getting in early at the seed stage for companies affords Lightstone a chance to help entrepreneurs shape their company’s trajectory moving into the future. For Lettmann, the ideal partner entrepreneurs are “operators” with experience in the space and with startups, but the firm still takes a hands-on approach when dealing with companies.
“I think one of the advantages of a fund of our size is the ability to really focus and spend the time to launch those companies,” he said. “We do really try to roll up our sleeves.”